Twelve Commandments of Investing

Phil Carret exercised safety-based commandments. And, the last one appears to be targeted towards “intelligent speculation.” There, he advised setting aside a proportion of available funds for long-term options on stocks in promising companies whenever available. With careful study and patience, Carret knew he could predict good outcomes. Philip Carret died on May 28, 1998, at age 101 at his home in Scarsdale, New York.

  1. Never hold fewer than 10 different securities covering five different fields of business;
  2. At least once every six months, reappraise every security held;
  3. Keep at least half the total fund in income producing securities;
  4. Consider (dividend) yield the least important factor in analyzing any stock;
  5. Be quick to take losses and reluctant to take profits;
  6. Never put more than 25% of a given fund into securities about which detailed information is not readily and regularly available;
  7. Avoid inside information as you would the plague;
  8. Seek facts diligently, advice never;
  9. Ignore mechanical formulas for value in securities;
  10. When stocks are high, money rates rising and business prosperous, at least half a given fund should be placed in short-term bonds;
  11. Borrow money sparingly and only when stocks are low, money rates low and falling and business depressed;
  12. Set aside a moderate proportion of available funds for the purchase of long-term options on stocks in promising companies whenever available.




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