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The 1st Step In Due Diligence

Everyone is so quick to say "Do your own Due Diligence" or "Due Diligence is the 1st step toward buying any stock" but so many people miss the first step of doing DD which is doing due diligence on yourself.

Know thyself..had I paid attention in that one philosophy class I might remembber if it was Socrates or Aristotle or that other Aristotle who married Jackie Kennedy who said that but whichever greek it was he should teach an investment class.

You'll never be a succesful investor unless you do DD on you.

What is your risk tolerance?

What are your financial assests?

What are your financial liabilities?

What personality assets do you have?

What personality liabilites must you fight to keep from hurting your investments?

What near term events can change these attributes?

What long term goals do you have for your investments?

What level of loss can you withstand?

What amount of gain is enough?

What is your timeframe?

What areas of expertise might you be able to use to your advantage?

What blind spots do you have in your knowledge and how can you mitigate them?

(I'm sure I'm missing many key elements to proper self-DD)

The answers seem basic until you really search deep in your psyche to understand if you can live playing penny stocks on margin to try to be a 23 year old millionaire or if you are risk averse and should think about never risking principle at all.

Knowing the status of your "personal balance sheet" allows you the foundation upon which you can construct a plan that fits you best. Only after compelteing inward DD should you start doing outward DD on companies, mutual funds, bonds or savings account interest rates.

The funny thing is so many people say stuff to me like "You invest in stocks what should I buy?" or "Where should I put my money?" even though I show no outward signs of financial success or acumen. It is enough that they have seen me checking my Yahoo portfolio and knowing that I don't stress over every paycheck to make them ready to listen and act on what I say. If I said dump thousands in "XYZ" because Blah blah blah some of the very smart people I know would do it.........and there are plenty of people out there and many in here at Seeking Alpha way too ready to exploit that mindset.

Craziness! They should be asking- Where can I learn about the stock market? What books and websites should I use to educate myself? Is there a place I can make a fake portfolio to see how I would have done if I......etc. etc. These are people who have failed to do personal DD on even the most basic level and if the sheep keep bleating the wolves will not go hungry.

Toasty "touch gloves and protect your investments at all times. Now come out trading" 54