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The 7 Eternal Laws of Stock Market Investing

James Montier, a long-time favourite among the readers of value investing, produced a white paper in March 2011, entitled “The Seven Immutable Laws of investing”.

In the paper, the investment strategist at the leading global investment management firm, GMO, presented a set of laws to guide investors towards investing sensibly in stock markets.

These laws are:

  1. Always insist on a margin of safety
  2. This time is never different
  3. Be patient and wait for the fat pitch
  4. Be contrarian
  5. Risk is the permanent loss of capital, never a number
  6. Be leery of leverage
  7. Never invest in something you don’t understand

These seven laws capture everything you need to become a smarter and successful investor.

I hope these help you to avoid some of the worst mistakes, which, when made, tend to lead investors down the path of permanent loss of capital.

Click here to read the white paper.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


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