Like other emerging market nations, it has entered a vicious cycle in which market skepticism creates higher borrowing costs and actually pushes the country closer to the abyss, its demise becoming a self fulfilling prophecy. Once that momentum begins, it is very hard to stop the decline in confidence. About the author: Cliff Wachtel
I stumbled across an interesting article recently, about ‘Market Timing’. We can all relate to spending hours on trying to pick the trough or top of a market cycle, or congratulate ourselves on getting in at the bottom and riding a sp to its peak.
This article goes on to explain that Market Timing is perhaps not that important, it all comes down to the individual’s mind-set around wealth.
“You have probably seen this phenomenon: there are successful investors that can make money regardless of the market conditions. They make good money during good times, and they make even better money during bad times.
To these successful investors, there is one thing that is constant: they make money regardless of changes in the market. Market Timing seems to have very little effect on them.
You have probably also seen the opposite phenomenon: there are investors that would lose money even when the market was doing great. These investors lose money during good times, and lose even more money during bad times.
To these unsuccessful investors, there is one thing that is constant: they lose money regardless of changes in the market. Market Timing also seems to have very little effect on them. “
Hmm, now there’s something to think about. Imagine having the good fortune to enter the market at ANY time and still make money.
The author goes on to get you to think of money as water and it seems that some people have a fixed sized cup to hold money – whenever they get near the cups maximum threshold one of life’s challenges comes along to ensure their cup never overflows.
So what we NEED to do, is to consciously make an effort to increase the size of our cup (the invisible mental capacity for wealth), and then we won’t really need to worry about Market Timing at all!
Sounds like a plan to me – I’ll order a beer stein.
Marcus Tullius Cicero was marginalized in the Roman senate. Frustrated without real power, Cicero began to write about how government should be run. As Caesar conquered Gaul and subsequently crossed the Rubicon, plunging Rome into civil war, Cicero was writing some of great works of political philosophy. While an accomplished orator and lawyer, Cicero’s most important achievement was his political career and writings.
He asked questions that still resonate today: What is the foundation of a just government? What kind of rule is better? How should a leader behave?
At the time of his writings his political influence had declined. He wrote to a friend: “I used to sit on the deck and hold the rudder of the state in my hands; now there’s scarcely room for me in the bilge.”
“For those who will listen,” Freeman writes, “Cicero still has important lessons to teach. Among these are:
Cicero would never have thought of this concept of natural law in terms used later by Christians, but he firmly believed that divine rules independent of time and place guarantee fundamental freedoms to everyone and constrain the way in which governments should behave. As the American Founding Fathers, careful students of Cicero, wrote in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”
Even the most noble kings will become tyrants if their reign is unchecked, just as democracy will degrade into mob rule if there are no constraints on popular power. A just government must be founded on a system of checks and balances. Beware the leader who sets aside constitutional rules claiming the need for expediency or security.
Those who would govern a country must possess great courage, ability, and resolve. True leaders always put the interest of their nation above their own. As Cicero says, governing a country is like steering a ship, especially when the storm winds begin to blow. If the captain is not able to hold a steady course, the voyage will end in disaster for all.
Leaders fail when they take their friends and allies for granted. Never neglect your supporters, but even more important, always make sure you know what your enemies are doing. Don’t be afraid to reach out to those who oppose you. Pride and stubbornness are luxuries you cannot afford. (more…)
Don’t miss to watch !!
What most traders often don’t realize until it is too late is how quickly one can lose a lot of money in a single trade often with disastrous consequences. More often than not this painful experience comes from poor risk management following a period of successful trading. It is natural of course. We are pattern seeking mammals and when something starts working for us we get confident in our abilities and quickly forget we know very little what the market or a given stock may do at any given moment. In short: We easily become overconfident.
It is after a period of successful trading that traders tend to loosen up on good intentioned rules of discipline. They start thinking in term of dollar signs as opposed to the trade discipline. In short they think they can fly. “Look how much money I would have made if I had traded x % of my portfolio”. Stop yourself right there. While it is tempting to play mind games like this no good will come of it. Why? Because you just stepped overtly into the realm of one of the greatest sins of trading:
Once you get greedy you will start abandoning necessary discipline. Nobody, I repeat nobody, no matter how smart they think they are has a fail proof system or process or secret trading technique that guarantees 100% success. I surely don’t. Neither does Goldman Sachs or anybody else. While there may be some HFT firms out there that are trying to algo their way to a perfect system I have news for you: You are not an HFT or an algo. You are an individual trader and as good as you may be: You will have losing trades, things will go against you and oddly enough this will happen when you are at your most vulnerable: When you are overconfident, greedy and overexposed. Something curious tends to happen though when the losing trade occurs:
