Warren Buffett's No. 1 rule of investing: "never lose money"

When i first read warren buffett rule of investing "never lose money", i was thinking it's such an obvious rule that he must have meant it to be a joke. Well, with rule no 2 as "never forget rule no.1", the rules seems clearly a joke. Who gets into the stock market to lose money anyway?

After 2 years of dabbling in the stocks market, i began to appreciate the significance of warren's investing rule.

Before we make any investment, we must always think of never to lose money (golden rule no.1). This may appear obvious at first and should the first thing on every investor mind. However on deeper analysis, never to lose money seems to be the last thing on most investor minds.

Reflecting on myself, the first thing that comes to my mind during investing is earning money. I'm sure this is the same for most investors. We all come into the market to make money.

We focus on dividend yield, earnings growth, price target and analysis reports on the next multi bagger. All of then are profit driven. We ask how much money we can make in this investment instead of asking how much can we potentially lose. By focusing on not to lose money, we will ask very different questions. Are there sufficient margin of safety in this investment? How much debt does the company have? Can it survived a crisis?
We start to focus on the downside rather than the upside.

It is important to understand that once we protect the downside, i.e. not to lose money, the upside will take care of itself.