At least ten hands shoot up in the air when the discussion turns to stock selection. The speaker smiles, responds to each one, and observes, “You really need to know the depth of the water, its temperature, the tides, and the currents before you dive into the river — and then what kind of predators are there?”

Flying low over the South Carolina coast, I’m probably the only person on the plane who sees meandering rivers and tidal creeks as a story of stock market cycles. How to navigate these complex connections without getting lost, running aground or being attacked by alligators?

How do you select equities in a way that consistently avoids the risks of volatile markets, fickle investors, abusive regulators, regressive tax codes, and brainwashed investment gurus? Along with self-confidence and experience, you need some management skills that most investors fail to hone before launching their ship: planning, organizing, and controlling.

Here is an overview, and it is hoped that it will provide structure and provoke thought as you go through most of the details and explanations that can be found in the “Brainwashing” book.

The investment planning stage is too often ignored by the young and new, and too often overcooked by the old and beaten. Most of the confusing indecision is due to the constant hype from the media and the endless barrage of data, news, software solutions, electronic tools and expert opinions. But most real investment mistakes are caused by invalid expectations, fear, greed, and a lack of discipline.

Markets have been and always will be volatile as they go up and down, predictable and unpredictable at the same time. If you can’t accept the market cycle and use it to your advantage, you will have trouble becoming a successful equity investor.

Planning involves two basic determinations: Can I afford to take the risks associated with investing in the stock market? Am I effectively preparing to meet my retirement income needs from my portfolio income pool? Clearly, if you don’t own any stocks whose primary goal is income generation, you’re missing a key element of portfolio development and need to plan better.

Another “planning” need is to define and identify a universe of stock picking that minimizes risk. First of all, the volatility of market prices is not an element of risk, it is the very nature of the actions. The real risk is the actual financial demise of the company you are partnering with when you buy its common stock. Clearly, the fundamental quality of the companies you buy from is an important consideration.

Investment-grade value stocks (you should Google this one) come to mind as a sort of shortlisted collection, or cast, of the best American multinational companies. ADRs from well-known foreign companies may also be examined internally for essential quality. Unfortunately for the lazy, there are no mutual funds made up solely of IGVS, and Market Cycle Investment Management’s “mirror portfolios” are still a gleam in an old man’s eye.

An overvalued, high-quality selection universe in the world offers few investment opportunities — why? Because the “traders” are right. The only reason to buy a stock is to sell it (as soon as possible in my book) for a reasonable profit. The higher the prices, the less likely it is that additional gains will come quickly, and what is a “reasonable gain”?

Managing your investment portfolio requires you to control your emotions with rules for both buying and selling. Operational simplicity is essential. Disciplined adherence to the rules you set is less simple and much more essential. To be successful, you must identify and immediately nullify everything you look, sound, taste, or smell in hindsight.

In stock investing/trading (one and the same), a lower market price is an opportunity to buy and a higher price an opportunity to profit. The number of individual issues within the equity segment of a portfolio should increase during downturns because more stock prices are entering an acceptable “lower price” buying zone.

The objective of the exercise is to have cash available to buy during each downturn; this cannot happen unless you have the courage to take profit when prices are rising. Yes, you are expected to feel stupid in both exercises. When you feel like you’re “out of stock too soon”, the bubble buster is just around the corner. When you know you re-entered the market too soon, the rally is just on the horizon.

The fact that your holdings move (excuse the use of this emotionally charged word, designed to make you lose money unnecessarily, trendy) “underwater” while the stock market corrects is irrelevant as long as they retain their quality, profitability, payment of dividends, etc. . You need tools to help you make this determination: S&P’s monthly stock guide comes to mind.

The investment management control process causes you to consider the inevitability of declining market value on your initial investment in any security. The organizational element keeps you diversified by security and by sector — all the diversification you really need with IGVS, which are typically multinational entities.

The buying rules must be somewhat complex so that you don’t go out and buy everything, it’s always a mistake. With some experience, you won’t find the need to buy anything until it’s down at least 20% from its 52-week high. Keep in mind that at this purchase price, the market value can increase 10% without setting a new 52-week high, which is very important from a psychological point of view.

Selling rules should be ridiculously simple, written in stone, unquestionable by anyone, and understood by your financial professional, if not the SEC (call me if you really want to laugh/cry about regulators).

Ten percent is a reasonable profit level; even less is okay if buying opportunities are plentiful.

No equity investor (trader, speculator, whatever) should let a reasonable profit go unrealized. No intelligent body of human beings should allow their elected representatives to perpetuate a tax code that encourages loss-taking over profit-taking, or that considers investment income of all kinds “unearned,” even ugly.