Remedy: Do your own homework. See if the fact that the stock isn't going to have earnings for the next three years (or whatever the story on the stock is) bothers you. Or if it has earnings already, has the market given the stock such a high valuation that if you wait for a while, you might be able to see the stock take a breather and buy it at a lower price? Also, don't buy much of it. If you have to move on it immediately, for whatever the emotional reason, buy just a few shares, then do your homework. Better yet, don't buy any of it until you know the stock well.

Mistake: Hanging on with hope. So many investors live in denial about their stocks. They continually hope things will get better, especially with stocks that have fallen a long way. The latest example that comes to mind is Sun Microsystems Inc. (NASDAQ: JAVA). This stock has had nothing but bad news for years. And after each announcement investors are hoping it's the last one. From now on, they hope, the rest will be good news. But it hasn't happened. Sun may turn things around and once again have great earnings, but the odds seem against that right now. With strong competition and weak tech spending by corporations, Sun is in a market that is extremely difficult. The question for an investor in the stock is whether the company will make any positive gains in a relatively short time or will the company be a casualty in the increasingly competitive server market? No one knows the answer to that. You do know management will be aggressively doing its best to make the company a success. But will that be enough?

Remedy: Cut back your position in any stock that has a series of bad announcements. The analogy often used is one of cockroaches. When you see one, you know there are more somewhere else. The best examples: Enron, Tyco, MCI. So if you must own a troubled stock, make it your smallest position or simply get out now and buy the stock back when it's on firmer financial ground.

Mistake: Selling a stock too soon. We've all sold stocks that skyrocket shortly after we sell them. That's usually because there's some good news that caught everyone by surprise whether it's better than expected earnings or a new product launch or even a takeover bid.

Remedy: Buy investing stocks and buy trading stocks. If you buy stocks for their business merits, you won't consider selling when it has a quick run up or a down draft. That's because you are in them for their long term development, not for a quick profit. Buy trading stocks, if you must trade, which I don't recommend for most investors because it takes a different personality to be successful. And buy the trading stocks in your retirement accounts so the taxes won't take any of your profits.

Mistake: Buying a stock because it has a low price, thinking it's cheap. We've all seen the high fliers get grounded. Many of them went out of business. It's easy to think a stock is cheap if it traded at $90 a share and can now be bought at $5. The confusion is in the pricing. Just because a stock is 90% off its highs, many investors think it is only a matter of time before it goes back to where it peaked.

Remedy: Take a deep breath before you buy one of these "bargain" stocks, count to ten, wait a couple of days, and do even more homework on these than other stocks. Don't confuse cheap with the price of a stock. Cheap only counts when there are great earnings or great asset values and the stock price doesn't reflect those facts. In other words, a $100 stock may be cheap if it's earning $20 a share and selling at only 5 times its earnings. A stock may be very expensive if it's selling at a $1and continually shows large losses every quarter, has no stockholder equity and no prospects for turning around.