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The Seven Pillars of Statistical Wisdom- Book Review

  
  Education
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The Seven Pillars of Statistical Wisdom by Steve Stigler provides an illuminating and entertaining foundation for statistical activity. The seven pillars are Aggregation, Information, Likelihood, Intercomparison, Regression, [Experiment] Design, and Residuals. Every page of the book contains something fascinating and instructive.

It is at once an adventure story, a history lesson, a textbook on the foundations of statistics, and a tour de force with ingenious extensions of the works of the great in each field in Stigler’s own inimitable hand — a persona that reminds one of Stigler’s heroes, Galton himself.

The level of the book is such that the layman and the expert will both gain from it. I found every page insightful and it uplifts one to be part of a field with so many ingenious founders, and to know that there are such pillars that hold the edifice up.

I recommend the book highly. It is a masterpiece classic that will live forever.

A FAIR APPROXIMATION FOR A SUCCESS FORMULA

  
  Education
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A fair approximation for a success formula would be:

  1. Pursue multiple sources of well-being and success;
  2. Express those through activities that bring favorable returns with minimal wear-and-tear;
  3. Stay flexible and rebalance your life periodically as needs and circumstances change.

In other words, life success requires savvy asset management. It’s not about pouring yourself into the next big opportunity or going with a consensus flow. Rather, success hinges upon deeply understanding the factors that create returns and finding the right expressions and blendings of these.

Life is more than a succession of unconnected trades. At its best, life is a portfolio of investments that generate positive and meaningful returns. That can only happen, however, if we take the reins and thoughtfully manage our life’s assets.

30 Rules for Traders

  
  Education
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  • Buying a weak stock is like betting on a slow horse. It is retarded.
  • Stocks are only cheap if they are going higher after you buy them.
  • Never trust a person more than the market. People lie, the market does not.
  • Controlling losers is a must; let your winners run out of control.
  • Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
  • Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
  • Emotional traders want to give the disciplined their money.
  • Trends have counter trends to shake the weak hands out of the market.
  • The market is usually efficient and can not be beat. Exploit inefficiencies.
  • To beat the market, you must have an edge. (more…)

15 Ways to Manage Trader Stress

  
  Education
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  1. Only risk 1% of total trading capital per trade with stop losses and proper position sizing. Proper positions sizing makes the emotional impact of any one trade only one of the next one hundred a totally different mental perspective than an all in/have to be right Hail Mary trade.

  2. Only trade a  position size you are comfortable with.
  3. Trade a method or system you believe in based on back testing of a positive expectancy.
  4. Know where you will get out of a trade before you get in.
  5. Only trade with a detailed trading plan.
  6. Believe in your ability to follow your trading plan. YOu must have faith in yourself to lower your stress levels.
  7. Know yourself as a trader and only take your kind of trades. Take trades that will leave no regrets because they were good trades regardless of out comes. (more…)

Felix Dennis on Mistaking Desire for Compulsion

  
Analysis, Education
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  • Wishing for or desiring something is futile without an inner compulsion to achieve it. Such lack of compulsion, if not frankly acknowledged, can lead to great personal unhappiness. We have all met deeply unhappy souls muddling along in professions or careers for which they are patently unsuited.
  • Worse still, by continually wishing and never delivering, you risk denting your confidence, beginning a vicious downward spiral that appears to draw misfortune like a magnet. The assumption that you might be able to achieve some goal if you only wish hard enough is not just a f***-up. It’s a potential personal tragedy.
  • Consider very carefully whether you are truly driven by inner demons to be rich. If you are not, then my earnest and heartfelt advice to you is: do not on any account make the attempt. What are riches anyway, compared to health or the peace of mind that even a modicum of contentment brings in its wake? In and of itself,great wealth very rarely, if ever, breeds contentment.
  • But no condescension is intended whatever when I ask you to quietly turn over in your mind whether or not you are fit to be rich. Whether the sacrifices involved — not only your own, but those you will ask of your family, present or future — are worth the tyranny that such ambition, by its very nature, exacts.
  • ‘Better to have tried and failed than not to have tried at all,’ drones the old saw. But in this instance, the cliche is wrong, utterly wrong. Better to have chosen a different life, a quite different path, than have placed yourself and those you love in harm’s way when early reflection and thought could have advised you differently. I repeat: do not mistake desire for compulsion. Those that do nearly always fail, at great cost to themselves and those around them.
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