Although investing is a subtle and complicated endeavor, everyone can benefit from a simple set of rules and principles. One of my favorite portfolio managers, Thomas K. Brown, chief executive of Second Curve Capital, a New York hedge fund that specializes in financial stocks, recently sent clients a little booklet called “My Ten Rules,” guidelines for building “a long-term successful track record.”
Brown was inspired by an excellent 2002 tome, “The Global-Investor Book of Investing Rules,” in which Philip Jenks and Stephen Eckett compiled advice from 150 professional sages, including Marc Faber, the Hong Kong bear; Ralph Wanger, founder of Columbia Acorn fund (LACAX), one of the great small-cap funds; and Bill Gross, the bond guru.
Some of Brown’s rules are obvious, others a bit technical. I have picked the five I like most and added comments.