During this extremely volatile market, investors need to be extremely prudent:

• Play defensive. Think survival. Do not fight the market. Focus only on companies and areas that are not related to credit crisis.
• Do not use leverage to buy any securities thinking you can make quick bucks in the short term. Short-term trading may result in huge profits for very few times and then suddenly stop working (means at the end, you could lose big time).
  
• Do not invest in companies that have high level of debts especially short-term debts.
• Think long-term only for position in companies that are solid and have low debt level.
• Be opportunistic only if you have a real edge and can afford to go through market volatility (means you know something that other wall street traders do not know)
• Keep it simple. For example: Wal Mart is simpler to analyze than Lehman Brothers, isn't it obvious?
• Think twice for multiple times before you do anything silly in this market. It is far easier to lose money than to gain money.
• If you must lose, do not wait until you lose a lot more than you can handle. Remember, it is far better to survive so that you are able to continue to invest later. If you do not have any sufficient capital to invest later, you can not buy anything later regardless how good the opportunities are. There is always another day, another price quote and another period to invest.
  
• Always remember the following wise words from the investment grandmasters (unless you are more successful than these guys!):
  
  • "If you're an investor, you're looking on what the asset is going to do, if you're a speculator, you're commonly focusing on what the price of the object is going to do, and that's not our game." ~ Warren Buffett
  • "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." ~ Warren Buffett
  • "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage." ~ Warren Buffett
  • "We will reject interesting opportunities rather than over-leverage our balance sheet." ~ Warren Buffett
  • "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." ~ Warren Buffett
  • "The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market." ~ George Soros
  • "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." ~ George Soros
  • "The way to build long-term returns is through preservation of capital and home runs." ~ George Soros
  • "The more the theory of efficient markets is believed, the less efficient the markets become." ~ George Soros
  • "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative" ~ Benjamin Graham
  • "Confronted with the challenge to distil the secret of sound investment into three words, we venture the motto, Margin of Safety." ~ Benjamin Graham
  • “The individual investor should act consistently as an investor and not as a speculator. This means... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.” ~ Benjamin Graham
  • “...there are many ways in which speculation may be unintelligent. Of these the foremost are: (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.” ~ Benjamin Graham