The days of Richard Dennis and his “turtles” with their alleged 100% per year profit are long gone, but their mystique lives on. And with it comes one attempt after the other to emulate them, to create trading systems that will knock the socks off the competition.
Robert Carver is more modest—and more realistic. At the same time he has more to offer the investor or trader who has a spark of creativity and intellectual curiosity. Systematic Trading: A Unique New Method for Designing Trading and Investing Systems(Harriman House, 2015) is a thoughtful, and thought-provoking, journey through the process of creating modular rule-based portfolios.
Although the book addresses three classes of traders and investors—the staunch systems trader, the semi-automatic trader, and the asset allocating investor, Carver is at heart a systems guy. He himself runs a futures trading system with around 45 instruments, eight trading rules drawn from four different styles, and 30 trading rule variations. But this doesn’t mean that he is writing only for those with large portfolios who can code. It does mean, however, that his book will be of value only to those who either already think systematically or are open-minded about learning how to analyze and assess the ingredients of a model investing framework. I would wager to say that this group should include every investor and trader, though in practice of course it encompasses but a tiny fraction of people who have money in the financial markets.
Here I’m going to be decidedly unsystematic and pluck out two ideas that are illustrative of the topics covered in the book.
Archives of “January 6, 2019” day
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Marty Zweig, Ned Davis, and Humility
It is perhaps poignant that with many people looking for a market correction and much talk of elevated sentiment measures bringing back memories of 1987, that we learned today of the death of Marty Zweig, widely known not only for the put-call ratio, and ‘Don’t fight the Fed’, but also his prescient call in October 1987 just before the crash.
Marty Zweig calls the Crash of ’87 (The whole thing is worth watching but Marty comes in around the 6:40 mark)
Watching that piece of history again there’s much that modern business networks could learn from it. Notice the easy-going style of Louis Rukeyser, the complete lack of confrontation with his panelists, no raised voices, no sound effects, no gotchas. This is after one of the most wretched weeks in Wall St, (worse was to come obviously), but you would barely know it from the calm civility which permeates their discussion.
What I particularly like and admire however, is in making his observations Marty Zweig is almost apologetic about it. He fears we’re on the verge of something severe but rather than take the opportunity for grandstanding as many of today’s pundits would, he’s almost scared to tell everyone. He says: (more…)
Greed & Fear
Watching Blue Channels ?One Major Reason for Trading loss
ALWAYS CUT LOSSES QUICK IT GIVES YOU A PEACE OF MIND
To Be Happy
If you are after specific investment advice, stop reading now. We seek to explore one of Adam Smith’s obsessions: what it means to be happy. We also discuss why that’s important to investors, and how we can seek to improve our own levels of happiness. The list below shows our top ten suggestions for improving happiness.
- Don’t equate happiness with money. People adapt to income shifts relatively quickly, the long lasting benefits are essentially zero.
- Exercise regularly. Taking regular exercise generates further energy, and stimulates the mind and the body.
- Have sex (preferably with someone you love). Sex is consistently rated as amongst the highest generators of happiness. So what are you waiting for?
- Devote time and effort to close relationships. Close relationships require work and effort, but pay vast rewards in terms of happiness.
- Pause for reflection, meditate on the good things in life. Simple reflection on the good aspects of life helps prevent hedonic adaptation.
- Seek work that engages your skills, look to enjoy your job. It makes sense to do something you enjoy. This in turn is likely to allow you to flourish at your job, creating a pleasant feedback loop.
- Give your body the sleep it needs.
- Don’t pursue happiness for its own sake, enjoy the moment. Faulty perceptions of what makes you happy, may lead to the wrong pursuits. Additionally, activities may become a means to an end, rather than something to be enjoyed, defeating the purpose in the first place.
- Take control of your life, set yourself achievable goals.
- Remember to follow all the rules.
Trading Wisdom
- Buy from the scared, sell to the greedy.
- Buy their pain, not their gain.
- Successful traders are quick to change their minds and have little pride of opinion.
- I made my money because I always got out too soon. (Bernard Baruch)
- Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars. (Bernard Baruch)
- Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. (Jesse Livermore)
- The faster a stock has climbed, the quicker it will fall.
- The more certain the crowd is, the surer it is to be wrong. (Menschel)
- Bear markets begin in good times. Bull markets begin in bad times
- Never confuse genius with a bull market.
- Always sell what shows you a loss and keep what shows you a profit
After 6 Years Of QE, And A $4.5 Trillion Balance Sheet, St. Louis Fed Admits QE Was A Mistake
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