Gene Marcial, who writes the influential BusinessWeek column "Inside Wall Street" has taken his 25+ years of investing knowledge and distilled it into a new book called "7 Commandments of Stock Investing." While at their core the "commandments" are all tied to the concept of Value investing-buying stocks when they are priced less than their "true" value-not all of them are the type of advice that the average investor should be willing or able to take.

The 7 commandments are:

1. Buy Panic
2. Concentrate, Diversify Not
3. Buy the Losers
4. Forget Timing
5. Follow the Insider
6. Don't Fear the Unknown
7. Always Invest for the Long Term: Seven Stocks for the Next Seven Years

Numbers 1, 3, 4, 5 & 7 are all easy to agree with, although not always easy to do well. Experienced value investors will tell you that "Buy Panic" and/or "Buy the Losers" is the way to grab stocks when they are at their lows, when they're out of favor but still have substantial assets that make them a decent bet to rise in the future. And while you may be buying stocks when they're at their lows, "Forget Timing" is not a contradiction, but a warning against using technical analysis to decide the exact second to make the purchase. Buying when company insiders are buying in the open market makes sense, because they presumably are in the best position to know about the company's future prospects. And investing for the long term is standard advice - whether you'll agree with Marcial's picks for 7 good stocks for the next few years or so is hard to say, but I like that he puts them out there and makes a case for them. This guy's got a lot of experience; there are worse people to get stock picks from.

Numbers 2 & 6 are debatable points for the average investor, I think. Most important, the advice to "Concentrate, Diversify Not" makes the case that if you want outsized returns, you can't be buying every stock in the market. You have to only buy the good ones.

Oh.

Well thanks, Gene, I never considered buying only the good stocks before. Every time I've bought individual stocks I've made the mistake of deciding to throw in a few crappy ones just because I felt sorry for them. OF COURSE you want to buy good stocks, but if your portfolio is made up of 10 or fewer stocks, a big hit to one of those stocks could lose you a LOT of money very quickly. Marcial uses examples of successful professional money managers who've made boatloads of money from this strategy-but he never mentions that many professional managers who use this strategy do very poorly. It's a big gamble, and unless you're really good at it, you could lose your shirt. I don't think Marcial is necessarily wrong, but he makes it sound much much easier than it is.

Also, "Don't Fear the Unknown", which means don't be afraid of buying foreign stocks or biotech companies with uncertain futures, is also shaky advice. Marcial offers specific suggestions to help you buy the "right" stocks, but once you've bought what he suggests, are you really ready to be taking chances on biotech companies you've never heard of that are doing clinical trials you don't understand?

Marcial uses a lot of examples to illustrate his points, but of course they are only examples of success. In this world, all the "losers" come up smelling like roses eventually, holding fewer stocks in your portfolio is not crazy risky but a good bet, and the gaming company in India is always the right pick. Again, this guy knows his stuff, but it's not as easy as it sounds.

For that reason, I would very much recommend 7 Commandments of Stock Investing to seasoned investors, but wonder if it's right for the average investor sitting in front of his/her computer buying stocks from a discount broker. If nothing else, the book gives you some good arguments for specific stocks you should look at (and they're all large cap, so you probably can't go too wrong with them), and it gives newbie investors the right advice about doing independent thinking and not following the overemotional crowd that generally sways the market more than the facts warrant. The "commandments" are fairly timeless, but because Marcial uses very specific examples of stocks to consider in illustrating his points, that information will become dated in a fairly short period of time. So if you want some hot tips from a guy who knows, you'll want to buy sooner rather than later.*

* By the way, I don't make any commission if you buy now OR later, so don't think that last line is a call to action. I don't really care if you buy the book or not.