The greatest risk of all
The greatest risk of all comes about because share buyers do not understand what they are buying. Frequently, they don’t have a clue as to what makes the business tick. We only need go back to the late 1990s to see this tendency as thousands of investors piled into dot-coms despite not being able to assess whether the business model proposed had any hope of success.
The great investors tell us that the best way to reduce risk is to investigate what you are buying into.* Don’t flail around buying this, that or the other on a whim, a tip or even broker advice. Find out about the people you are handing your money over to (the directors of the company), about the state of the industry (see Chapter 10), whether the company ...
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