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12 Market Wisdoms from Gerald Loeb

  
  Education
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It is funny how the best traders of all times basically repeat the same things with different words. 

Gerald Loeb is the author of ‘The Battle for Investment Survival’ and is one of the most quotable men on Wall Street.  Here are 12 of the smartest things he has ever said about the stock market:

1. The single most important factor in shaping security markets is public psychology.

2. To make money in the stock market you either have to be ahead of the crowd or very sure they are going in the same direction for some time to come.

3. Accepting losses is the most important single investment device to insure safety of capital.

4. The difference between the investor who year in and year out procures for himself a final net profit, and the one who is usually in the red, is not entirely a question of superior selection of stocks or superior timing. Rather, it is also a case of knowing how to capitalize successes and curtail failures.

5. One useful fact to remember is that the most important indications are made in the early stages of a broad market move. Nine times out of ten the leaders of an advance are the stocks that make new highs ahead of the averages.

6. There is a saying, “A picture is worth a thousand words.” One might paraphrase this by saying a profit is worth more than endless alibis or explanations. . . prices and trends are really the best and simplest “indicators” you can find. (more…)

10 Secrets To Success

  
  Education
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SUCCESS-1) How You Think Is Everything – Always be positive. Think success, not failure. Beware of a negative environment.

2) Decide Upon Your True Dreams & Goals – Write down your specific goals and develop a plan to reach them.

3) Take Action – Goals are nothing without action. Don’t be afraid to get started. Just do it.

4) Never Stop Learning – Go back to school or read books. Get training and acquire skills.

5) Be Persistent & Work Hard – Success is a marathon, not a sprint. Never give up.

6) Learn To Analyze Details – Get all the facts, all the input. Learn from your
mistakes.

Is The Market Always Right?

  
  Education
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George Soros likes to joke that market has predicted seven of the past two recessions. And he is right. Since the market is forward looking, it will sometimes discount fundamentals that will never become a reality.

Prices reflect people’s expectations about the future, mostly about the near-term future. To say that the market is always right means to assume that people’s expectations about the future always come true. We all know that this is not the case. No one has a crystal ball. People are often wrong.

Is the market always right?

No, but this does not stop people who follow price trends to make a lot of money. The market could remain “wrong” (irrational) for a very long period of time and even become “wronger”. (more…)

The Golden Rule

  
  Education
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10% of your trades will account for 90% of your profits

1 or 2 months will account for most of your annual profits

1 or 2 days will account for most of your monthly profits

Good investors and traders know that very well. They are ready to press extra hard when realize that they might have a home run in play. They are ready to disappear in 60 seconds when things don’t go as planned.

Dennis Gartman knows that The Golden Rule is what distinguishes smart from not so smart money:

We’ve learned one good lesson from that one trade, and that is that we only get one or two or perhaps three good ideas each year that work. So, when they work, it is our duty to beat them into submission; to add to them when we can; to embrace them as they insulate themselves from random market noise, and to use them to make up for the myriad numbers of truly idiotic ideas  we are capable of coming up with, keeping those losses small.

Sometimes one good opportunity could turn your life upside down.

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