Track your forecasts. Whenever you've got a strong opinion about where a stock, or the market, is headed, jot it down and note the date. This will keep you from conveniently forgetting your failed forecasts and may provide you with a humbling reminder of your limitations as a soothsayer. And whenever some analyst seems to know what he's talking about, remember that pigs will fly before he'll ever release a full list of his past forecasts, including the bloopers. Defy the chaos.
Diversification is another principle that defies chaos.
Consider the danger of investing almost exclusively in tech stocks. Broad diversification is still the best insurance against the risk of making an investment mistake. And there's nothing random about that. Time Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.