Mistakes we made over and over

There are a few mistakes we like to make over and over again as an individual investor. I made these 
mistakes more than once before. In recent yrs, I watch these bad behaviors closely and try to avoid them at all cost. But still, they will come back and test me. 

Here they are but not least:

1. Chase hot stocks and ignore crowded trade.
    Hot stocks are usually overvalued. When individual investors start to notice them, they are already in late stage. Entire rally is about to be over or big set back is about to come. The good indicator is that DQ and TZLC start to have many posts concerning these stocks. The trade becomes too crowded. In such case, you want to avoid these stocks at all cost. Or even go against the crowd. Recent example is Solar stock, Biotech stock, etc.

2. Ignore boring stocks:
   Ignore boring stocks is probably one biggest mistake people usually do. Because there aren't much going down in them. No media coverage. Under the radar. But these stocks give you most of the returns. In one research report on what Buffet buys, it points out the low valotility boring stocks made him the most money. Recent example is Tobacco stocks such as RAI and MO.

3. React too quick:
   It often says that sell first ask question later. I think such statement has many flaws. More often we see that a stock gap down in after hours because some so so ER (5% or more). Some investors got spooked and sold into after hour low volume risky environment. Then next moring in conference call, company gives some good comments. Stock rally right back. This is what I called react too fast. I think you should ingore most media comments and news, forums, etc. about the stock. The only thing you have to read is conference call transcript and quarterly report. Before you read them, don't tough your position. Even the bad news is really bad, gap down price is already reflecting it. Selling may not do any good to you. The time you want to get out quickly is that there is a big fundamental changes you believe is happening after you read CC transcript and Financial report.

4. All in and All out:
   All in and All out is another mistake we like to make. And the decision is usually wrong. Many companies have some temporary difficult times, even the best company such as AAPL. In such case, selling all postion may not do any good to us because such correction give a big opportunity to long term investors. You can reduce your position in half in order to hold the best company instead of kill all postions. This will give you some cash so you can buy whole position back when things get better. Same to buy in. Buy whole position in once trade will also make you regret when some unexpected news come out. 

5. Day trade: 
   Many believe the day trade can make them money. Some could. But most will lost a fortune by day trading. Individuals simply don't have enough tools, resources and skills to compete with professionals, and expecially machines. We have absolutely no edge. 

6. Hold inverse ETF
   These things are fortune killers. I saw people on DQ lost lots of money by playing SDS, TZA. These are basically for day trade. By holding overnight, you are taking lots of risk.

7. Low on cash
    Cash is your life line. Without cash, you won't be flexible at all. I usually hold at lease 10% in all my accounts. It gives me lot of confidence to manage risk and ability to buy dip. Watch your cash level. Never run low on cash.

...

There will be more of these mistakes we like to make. Write them down and review them often is the key to success. Correcting these mistakes over time is much more important than picking a winning stock. Once you can avoid making such mistakes, return will take care of itself.