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The first book I grabbed was Gerald Loeb's Battle for Investment Survival. It was published after the Correction of 1929 and is regularly updated. Mr. Loeb's book is known as the average investor's Bible, and all the more believable since Mr. Loeb is reputed to have made millions in the market himself.

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Mr. Loeb can't overemphasize the importance of making just one investment at a time and then living with it. "The greatest safety lies in putting all your eggs in one basket and then watching the basket," he says. He opens his book with this rule and then devotes many pages to its support, with example after example of irrefutable evidence. According to him, most average investors foolishly try to diversify their holdings and spread their money around. This results in one thing always going down while something else is going up, so the best we can ever do is break even.

Mr. Loeb argues this point so intelligently that by the end of his first chapter I was convinced that diversification was the cause of many of my earlier troubles. I decided right then to sink my entire $16,500 stake into the first profitable opportunity that came along.

That decision lasted as long as it took to put down Mr. Loeb's work and pick up Money Angles, written by Andrew Tobias. It is odd to find a new investment book written by a man who earlier wrote The Only Investment Guide You'll Ever Need, but Mr. Tobias has a keen mind and should be allowed to change it. On page 23 of Money Angles Mr. Tobias offers his ironclad first rule— "buy low, sell high"—which I'd always ignored in favor of the reverse. Then on page 25, he gives an ironclad second rule: "Diversify." "It's remarkable how many of us chickens manage inadvertently to have most of our eggs you know where," writes Mr. Tobias.

This was 180 degrees from Mr. Loeb's position. I might have ignored it, except that Mr. Tobias gives example after example of irrefutable evidence. He tells enough horror stories of stocks and bonds that suffered unexpected mishaps, of companies suddenly gone bankrupt, of investors who lost their life savings on a single bad investment that Mr. Loeb's one-basket theory seemed not only foolhardly, but suicidal. I promised myself then and there that I'd spread my money around in numerous baskets.

After returning Money Angles to its hole in the shelf I made a frantic riffle through dozens of other how-to books, searching for the guiding principles offered by other experts of stature equal to Mr. Tobias and Mr. Loeb. To save you the same trouble, I've summarized the results in the following list. It's a comprehensive review of all the time-tested rules of investing from the best minds on Wall Street. For easier reference, I've arranged these in pairs:

No doubt you've come across some or all of the above rules of investing in newspapers and business magazines, where they are frequently repeated, though not always side by side. Reading them one after another, I was struck by the unusual tolerance we have for differences of opinion on matters of money. I tried to think of another subject, art or science, where the guiding principles contradict one another so completely and yet are simultaneously held in equal esteem by the same audience. Only in diet and health-food books is there anything remotely similar. Buyers of diet books can tolerate one contradictory scientific theory after another while failing to lose weight, and perhaps the same can be said for consumers of investment advice who have yet to see a profit.

Was there not a single principle on which the Wall Street experts could agree in print? Actually, I found only one: the average investor is alwayswrong. It was surprising to see this so openly admitted in the very books that offer us their help! Mr. Tobias, for instance, hardly waits a single page to announce that most people are the last ones in on a stock deal, and it's the 95 percent that enrich the other five, and so on. Then in the 200 pages that follow, he advises us 95-percenters how to go out and buy stocks! In between giving his suggestions, Mr. Loeb takes time out to declare the average investor a hopeless case. He even recommends his favorite book—Extraordinary Popular Delusions and the Madness of Crowds, written by MacKay in 1841—as proof that the masses are eternally misguided. In the introduction to an investment system he is trying to popularize, Benjamin Graham blurts out: "The advent of popularity marks the exact moment when a system ceases to work well."

There are numerous other examples, but it's no use wasting more space on them. I was struck by the inevitable futility of reading further, since all investment advisers want to write bestsellers, yet popularity, by definition, dooms their advice. If I'd realized this earlier, I wouldn't have camped out in the stacks.

Who, then, was an average investor to believe? As I was beginning to despair of finding an answer, I saw a newsletter called Street Smart Investing, in which the publisher, a Mr. Kiril Socoloff, suggests a sure way to make money from best-selling investment books: take the advice and do the opposite! He tested his theory back through the entire twentieth century…

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Now I was onto a tactic that seemed foolproof. Since I counted myself as an average investor, I'd simply do the opposite of anything that struck me as profitable. This idea was so exciting that I thanked Mr. Socolow under my breath, and then jotted down Useful Tip Number Six:

If you think it's right, then it's wrong—and vice versa

As quickly as possible, I quit the library for my own bedroom, where I spent several days watching the Financial News Network on television. With great concentration, I waited to be persuaded of something so I could do just the opposite. With the continuous ticker tape running across the bottom of this channel, the flow of symbols put me into the usual semihypnotic state and heightened my susceptibility to suggestion. Soon, a man from a Colorado investment service said we were going back into a deflationary period. Since I was absolutely convinced he was right, I leapt up and went looking for my wife, to tell her that the country was going into an inflationary period and we should invest in gold, natural resources, and other hard assets.

I returned to the television, where a half hour later an MIT economist said we really were going into an inflationary period, that we'd soon be in a credit crunch and the government would have to innate its way out of debt. To me this could only mean one thing: deflation. I cornered my wife again, to inform her I'd changed my mind. Since hard assets were losing propositions, I'd decided to put my money into paper assets such as bonds. I also suggested that we sell our house and rent instead.

In these intense few days, I was convinced to buy gold because I heard it was going down, to sell gold because it was going up, to invest in a stock market poised for a 10 percent decline, to get out of a stock market poised for a 10 percent advance, to resist junk bonds due to their exceeding popularity, to buy Federal Express shares due to their recent unpopularity, to switch into European currencies because Europe was losing credibility, and especially to buy sugar, since I'd learned the price was collapsing.

Doing the opposite of what you really think is not easy. About a week after I'd congratulated myself on having stumbled onto the Contrarian approach to investing, I heard on the same FNN channel that Contrarianism was getting very popular. In fact, Contrarianism had become a preferred strategy with the general public. An advisor named Treadway came on the screen to announce that Contrarianism was so rampant that the true Contrarian was no longer a Contrarian. Mr. Treadway said he'd stopped being contrary himself just to avoid the Contrarianism of the crowd.

That meant that to be truly contrary, I'd have to contradict my Contrarianism—in other words, buy gold if I thought gold was going up or avoid bonds if I thought bonds were going down. By now, I was completely confused, and I hadn't bought a thing. Here I'd rejected financial planning in favor of my own research, and my own research had left me logically paralyzed. Meanwhile, the money was still sitting in the savings-and-loan, gathering its paltry interest. I decided that I needed help, and I could get it from a familiar source: the local stockbroker.

This article is excerpted from 'A Fool and His Money - The Odyssey of an Average Investor' by John Rothchild.