Mark Twain – “October. This is one of the peculiarly dangerous months to speculate in stocks…”

From his novel, Pudd’nhead Wilson – “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

Haha, yet another witty phrase from Mark Twain. Given the recent thumping in the stock market (Oct 08), I bet your attention was grabbed by Mark Twain’s quote; thinking that he has some insights on the dangerous months to speculate in stocks. In actual fact, he is trying to tell you that every month is dangerous as long as you speculate.

I always have a clear definition for speculation – When investing, if you do not know what you are doing, you are speculating. It does not matter whether you are buying value stocks, growth stocks or relying on charts to make your investment decisions. You don’t understand = You speculate = You lose money.

See what Warren Buffett has to say.

• Jesse Livermore – “People who look for easy money…”
• Albert Einstein – “Imagination is more important than knowledge”
• John D. Rockefeller – “The way to make money…”
• Albert Einstein – "The greatest invention of all time was compound interest."
• George Soros – "It’s not whether you’re right or wrong…"
• Derek Bok – "If education is expensive, try ignorance."
• Sir Isaac Newton – "I can calculate the motion of heavenly bodies, but not the madness of people"