Here are 3 that I believe will come in handy for you in the future.

1. New Isn’t Always Good

We humans are almost always excited by change. Anything that’s ‘new’ is always a cause of amazement, even if it’s temporary.

This is also true when it comes to businesses. New businesses attract us as investors, and we are willing to pay any price to get a share of the same.

The bigger the dream that is shown to us, the more we believe in the same. Think Reliance Power or any other failed IPO here (and they are in plenty).

Small investors were lured to invest in businesses that did not earn a rupee in profit. And they were lured by hopes of huge future profits.

“SKS is a novel business idea, so I think I can make a lot of money investing in it!” This was a general thought among several investors I’d met before the company’s IPO in 2010.

You see, in investing, new isn’t always good. In fact, new is risky, as it has been proven in the SKS case.

You must never invest in companies that don’t have a few years of good performance to show for. After all, you don’t have the appetite of a venture capitalist or a private equity investor.

You are a small investor, who can’t afford to risk his hard-earned savings into ‘new’ businesses that don’t have a past.

Like in the advertisement of a leading Indian car brand, always ask this before applying to any IPO – “Kitnadetihai?” (What’s the mileage?)