That’s a refrain that Jim Cramer has been emphasizing on his CNBC show tonight. Not buy and hold, but “buy and homework.”

It’s a lesson I should have taken to heart much easier. Don’t get me wrong, looking at the big picture my portfolio has done pretty well. More years than not I’ve done better than the broad market. But I’ve also held onto some stinkers when I should have known better, and sitting down and really delving into quarterly reports and conference calls probably would have spurred me to hit the sell button before watching my bad stocks fall even further (I’m thinking of you, GE).

Sometimes, I even feel that I’ve become sort of emotionally attached to stocks that have been good to me in the past, and so I hold on even after the investing thesis that I bought into starts to erode on the basis of changing market conditions or management strategies. “The market is a harsh mistress,” Jim Cramer says. He’s got a good point.

I’m a big proponent of do-it-yourself investing, if you have the time and aptitude for researching companies and markets. I’m usually good at doing the upfront research before I take a stake in a new company. But homework doesn’t end after the first class session. Where I’ve sometimes fallen short is continuing to track a company’s results and prospects after I’ve been in it for a while. Now I realize that homework is forever.

 

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