1. Never outshine the master. (You can trade better than your mentor, just don’t expect him to like it. You’ll also learn more from people who you help, than from those who you work against.)
2. Never put too much trust in friends. Learn how to use enemies. (The only one you can trust as a trader is yourself and your own decisions. When the herd is against your positions, find something that is misunderstood, overlooked, or not fully recognized in the current stock price.)
3. Conceal your intentions. (Limit orders are good for the novice and undisciplined, but the market makers will never let you pick off the bottoms and tops using these.)
4. Always say less than necessary. (Talk is cheap and being concise is a good thing. It’s ok to keep some things you learn and strategies you create all to yourself.)
5. So much depends on reputation – guard it with your life. (Wall Street watches where the smart money is going at all times and herd-like patterns typically follow. Find those with the best reputation and figure out what they’re doing now. It will help unlock some secrets to their success.)
6. Court attention at all cost. (The key is to be ahead of the tape before Wall Street takes notice. Find stocks that few are looking at which offer tremendous growth prospects. They’ll be tomorrow’s winners, not the stocks you hear so much about right now.)
7. Get others to do the work for you, but always take the credit.(It’s ok to use others’ research and opinions, but realize that none of these can serve as a substitution for common sense and developing your own edge in the market. What is already known and published by others has already been acted upon no matter what you may think or have been told. Assume you’re always the last to know.)
8. Make other people come to you – use bait if necessary.(Success breeds popularity. If others think that they can learn or profit from you, you’ll never be lonely. However, with respect also comes responsibility to act in the best interests of others, many times before your own.)
9. Win through your actions, never through argument. (Don’t waste time convincing others on message boards how good or bad a stock is and/or telling people how smart you were because of good calls you’ve made in the past. Instead, trade the stock and make your profit. Talk will never pay your bills. Show others by demonstration, not by time wasting chatter.)
10. Infection: avoid the unhappy and unlucky. (This is right on the money. I couldn’t have said this better myself. Who you surround yourself with will ultimately determine your destiny. Marry for love, choose your friends carefully, and spend time with people who’ve been more successful and who are much smarter than you. Good and bad emotional states are as infectious as a disease.)
11. Learn to keep people dependent on you. (If you tell everyone everything you know, they’ll end up knowing more than you know. Having others dependent on you will also serve as great motivation, especially when times are tough and you need a reason to work harder than ever before.)
12. Win through your actions, never through argument. (At the end of the day, all that matters is that you make good trades or investment decisions. There’s lots of hype in this business and you should run, not walk, from anyone who spends more time talking than learning.)
13. Use selective honesty and generosity to disarm your victim.(Sorry, I’m not in agreement with this. In my view, you have to be honest with yourself and others at all times. In addition, generosity is always a good thing, especially when it is done without the desire of getting something in return. Having good Karma through generous acts also go a long way in keeping the trading gods on your side!)
14. When asking for help, appeal to people’s self-interest, never to their mercy or gratitude. (Sad, but true. If you can help others, they’ll be far more likely to help you. I know I always make a tremendous effort to help those who’ve helped me in the past.)
15. Pose as a friend, work as a spy. (You can find out more about people and companies you invest in by having friends who have specialized knowledge about certain industries. Their unique insight can be a powerful edge if you can get it. Sometimes a simple phone call or email to someone who works in the business will tell you much more than any chart or balance sheet.)
16. Crush your enemy totally. (When you’re right in a trade or investment and things are going well, don’t back off UNTIL you have good reason to sell.)
17. Use absence to increase respect and honor. (Knowing when not to trade is a skill few possess. Take vacations and breaks away from the market. It will only empower you to return refreshed, relaxed, and well-motivated. Remember, we trade to live, not live to trade. Achieving balance in your work and personal life will lay the foundation for long-term success.)
18. Keep others in suspended terror: cultivate an air of unpredictability. (It’s good to mix it up from time to time to relieve trading/investing boredom. If you think you’re in a rut, make some changes and go find something you can get excited about again.)
19. Do not build fortresses to protect yourself – isolation is dangerous. (Take time to bounce ideas off of people who are smarter than you. At all times, seek out opinions that are against you instead of with you – you’ll learn a great deal more. And, remember, no one is right all of the time. But some people are more right than others.)
20. Know who you’re dealing with – do not offend the wrong person. (As a small investor, it is best to avoid picking fights with market elephants (i.e. institutions, hedge funds) who think they know your stock better than you do. They have the power to move the market and your stock for longer than you have time or money to fight it.)
21. Do not commit to anyone. (Do not fall in love with any stock or trading system. No matter how great they are now, eventually all will find a way to disappoint you down the road.)
22. Play a sucker to catch a sucker – seem dumber than your mark. (We would all be better off to keep our mouths shut and to learn more. When you think you’ve got everything figured out, be careful. At all times, avoid the ever-present temptation to think that you’re smarter than the market.)
23. Use the surrender tactic: transform weakness into power.(Know your weaknesses and strengths and use both to your advantage by trading and investing in a way that maximizes your strengths while offsetting your weaknesses. As they saying goes, the market is a very expensive place to find out who you really are. Know what you’re good at and develop a strategy that takes advantage of it fully. Developing your trading niche is the key to long-term success.)
24. Concentrate your forces. (Over-diversification and redundancy in allocation is a recipe for underperformance.)
25. Play the perfect courtier. (You’ll learn more from people you treat well than the other way around. Being nice and treating others the way you want and expect to be treated even if they don’t deserve it is a good way to live.)
26. Re-create yourself. (Always work on new strategies. Stagnation, comfortability, and resting on your past success will not serve you well when, not if, the market changes.)
27. Keep your hands clean. (Do not engage in pump and dump situations, pyramid schemes, insider information, shady tax-avoidance methods, or anything that is illegal or just morally wrong. Eventually, all misdeeds will not be worth the price you’ll eventually have to pay.)
28. Play on people’s need to believe to create a cultlike following. (People need to believe the market will always go up and that every stock will work out “in the long run.” The truth is that your need to believe that things will always work out should never prevent you from making rational investment or trading decisions. Hope and faith has no place in your approach with the market.)
29. Enter action with boldness. (When you are right and the market confirms it, put more money on the trade or investment. Do the exact opposite when the market moves against you and your positions – always cut your losers short.)
30. Plan all the way to the end. (Know your exit points before making any trade. Focus on how much you’re willing to lose, not how much money you stand to profit. Determine the risk versus reward and develop “what if” scenarios at all times. Remember, a profit on paper means nothing until you ring the cash register.)
31. Make your accomplishments seem effortless. (You can make this game as challenging or as easy as you would like. Some of the lazy portfolio strategies are the very best for vast majority of investors. Remember, complexity in strategy does not equate success. Keep it simple stupid whenever possible!)
32. Control the options: get others to play with the cards you deal. (We all seek profits, but the market is a zero sum game. Control yourself and how you approach the game and you’ll have the edge over the guy on the other side of the trade. Trading is war and every war is won before it begins. Preparation, homework, and skills you’ve developed will tilt the odds in your favor on the battlefield.)
33. Play to people’s fantasies. (Visualize success and you’ll be successful. Visualize failure and failure will follow. Figure out where you want to be in 5 years and work every single day toward that dream. And, don’t forget to dream big!)
34. Discover each man’s thumbscrew. (Understand the logic of the other person on the trade and know their limitations. Exploit their greed and fear when possible. The best opportunities come when the market overshoots in the extreme.)
35. Be royal in your own fashion: act like a king to be treated like one. (If you haven’t been successful in the market, put it behind you and start thinking and acting like a winner. Build your confidence and skills and always act professional. This is serious business, so treat it that way. You are in control over your destiny.)
36. Master the art of timing. (Learn to master the art of patience. Remember, being early is the equivalent of being wrong. A great stock can be a loser if your timing is poor. Likewise, failure to take swift corrective action when the bad signs are there will cost you more than anything else.)
37. Disdain things you cannot have: ignoring them is the best revenge. (As investors and traders, we will never have all of the facts. We can only make decisions based on what we know and have access to. As a little guy investor/trader, you should know that we’re always the last to know and act accordingly. The market is manipulated by those far more powerful than any of us will be and that will never change. We don’t live in a perfect world, but that doesn’t mean we can’t find ways to profit.)
38. Create compelling spectacles. (There’s nothing like big success to silence your enemies and dismay your detractors.)
39. Think as you like, but behave like others. (Go with the trend when possible, but always remain skeptical and think independently. However, when everyone starts thinking alike and is very confident in those views, be extremely careful.)
40. Stir up waters to catch fish. (Look for opportunities where no one likes to go. The best stocks over the next 20 years will be stocks no one knows about today. Use stock screens to ferret out the unknown and undiscovered.)
41. Despise the free lunch. (Don’t take free advice from friends, family, websites, magazines, television, newspapers, or newsletters. And, even when you pay for advice, understand that you must take full responsibility for every single decision you make. And, remember, what has worth is worth paying for.)
42. Avoid stepping into a great man’s shoes. (Trade within reason and know your own limitations. Swing for singles, not home runs each and every time. Very few people can trade like the pros and still have a normal day job. Customize your approach to the time and skills you have right now.)
43. Strike the shepherd and the sheep will scatter. (For every sector, pick a leadership stock and put that stock on your radar. If it falters, the rest of the group will as well, especially those at the bottom tier which will fall faster and harder than the rest.)
44. Work on the hearts and minds of others. (Knowing what the market loves and hates the most will lead you to opportunities. Knowing what the herd thinks and feels at all times is crucial.)
45. Disarm and infuriate with the mirror effect. (Good traders know what is working well and who has the hot hand and why. Use that information to your advantage.)
46. Never appear too perfect. (Hubris is the enemy. We’re only as good as our next trade. All track records – especially very good ones – are absolutely meaningless. Stay humble or the market will do that for you.)
47. Do not go past the mark you aimed for. In victory, learn when to stop. (Know your exits and stick to them. The biggest losses usually come right after our largest successes in the market. Know this and guard against it.)
48. Assume formlessness. (Have a plan and be confident in that plan, but don’t stay stubborn when you are wrong. Flexibility to take corrective action and willingness to accept it and move on will serve you well. Change in the market is an ever present challenge.)