Rule 3: Look for stocks whose stories of anticipated growth are of the kind on which investors can build castles in the air. I have stressed the importance of psychological elements in stock-price determination. Individual and institutional investors are not computers that calculate warranted price-earnings multiples and print out buy and sell decisions. They are emotional human beings—driven by greed, gambling instincts, hope, and fear in their stock-market decisions. This is why successful investing demands both intellectual and psychological acuteness. Stocks that produce “good feelings” in
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