| “When in doubt do nothing. Don’t enter the market on half convictions; wait till the convictions are fully matured….. And so, whenever we feel these elements of uncertainty, either in our conclusions or in the positions we hold, let us clean the house and become observers until as that eminent trader Dickson G Watts wrote, “The mind is clear; the judgement trustworthy.” |
Archives of “January 2019” month
rssWhat does Germany think about Europe?
The Most Important Lessons from Business
Number 1 is never to get in over your head. Not having staying power will prevent you from reaping the benefits that occur on those small number of businesses you own that need just a little bit more before striking the gusher.
Number 2 is never under any circumstances accept an offer out of the clear blue sky for your share of the business that seemingly is good, but where the party offering you the buyout knows much more than you do. I have lost millions on many occasions by accepting a quick profit in a deal where it turned out if I waited a year or two or three, I would have realized a tremendous windfall.
Number 3 is not to mix romance with business. Romance should come out of business not business out of romance. The romantic aspect will cause a strain and make you look foolish too all your colleagues.
Number 4 is not to have 3 person partnerships as too many coalitions can form, and you will be involved in diplomacy rather than business.
Number 5 is to keep your business consistent with the idea that has the world in its grip. Give your customers what they want, and give returns and the customer is always right.
Number 6 is to be sure that you are aligned with the forces in Washington that control so much of life these days, and have so much in perks and profits to give to their cronies.
Number 7 is to associate yourself with good partners, and good friends, and good employees whose loyalty goes beyond the dollar or the clock. An ounce of loyalty and integrity is worth more than a pound of immediate profits. When the going gets tough, and it always does in business, you need to have the loyal ones. Certain groups and certain belief systems are aphoristic and proverbial for their disloyalty and tendency to deceit and they should be avoided.
Number 8 is to always remember that when dealing with a family business, the loyalty of the family members is to themselves but not to you. The worst short term frauds and cons, and some of the worst long term cons, I have been victimized in had a father and son working in concert to deceive you into giving them your chips. (more…)
This cycle plays out on many time frames for Investors & Traders
The most important lesson from 83,000 brain scans | Daniel Amen -Must Watch Video
Brain Scan of Politicians is Must and Everybody should know the Details too.
Thought For A Day
Zen of Trading- 10 Rules
1. Have a Comprehensive Plan: Whether you are an investor or active trader, you must have a plan. Too many investors have no strategy at all — they merely react to each twitch of the market on the fly. If you fail to plan, goes the saying, then you plan to fail.
Consider how Roger Clemens approaches a game. He studies his opponent, constructs his game plan and goes to work.
Investors should write up a business plan, as if they were asking a Venture Capitalist for start-up money; just because you are the angel investor doesn’t mean you should skip the planning stages.
2. Expect to Be Wrong: We’ve discussed this previously, but it is such a key aspect of successful investing that it bears repeating. You will be wrong, you will be wrong often and, occasionally, you will be spectacularly wrong.
Michael Jordan has a fabulous perspective on the subject: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty six times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
Jordan was the greatest ball player of all time, and not only because of his superb physical skills: He understood the nature and importance of failure, and placed it appropriately within a larger framework of the game. (more…)
The tape does not concern itself with the why and wherefore. – Jesse Livermore
The 14 Stages of Trading Psychology
1. OPTIMISM – It all starts with a hunch or a positive outlook leading us to buy a stock.
2. EXCITEMENT – Things start moving our way and we get giddy inside. We start to anticipate and hope that a possible success story is in the making
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3. THRILL – The market continues to be favorable and we just can’t help but start
to feel a little “Smart.” At this point we have complete confidence in trading system
4. EUPHORIA – This marks the point of maximum financial risk but also maximum financial gain. Our investments turn into quick and easy profits, so we begin to ignore the basic concept of risk We now start trading anything that we can get our hands on to make a buck.
5. ANXIETY – Oh no – it’s turning around! The markets start to show their first signs of taking your “hard earned” gains back. But having never seen this happen, we still remain ultra greedy and think the long-term trend is higher.
6. DENIAL – The markets don’t turn as quickly as we had hoped. There must be something wrong we think to ourselves. Our “long-term” view now shortens to a near-term hope of an improvement.
7. FEAR – Reality sets in that we are not as smart as we once thought. Instead of being confident in our trading we become confused. At this point we should get out with a small profitand move on but we don’t for some stupid reason. (more…)
Difference between Real Traders and the mass
1) Trading – Speculating – Gambling – In the eyes of the vast majority, these things are blurred together, and very many things that the herd get up to in the name of “trading” is really either speculating or gambling. To that end, much of the advice published on the subject of trading can equally be as confused.But not to real traders; real traders know the difference and are very clear that what they are doing is neither speculating or gambling. Just because you can know your risk per trade when speculating or gambling does NOT mean you are trading. Every game at the roulette table you can know your risk. Think about that…
2) Real traders create and trade systems. They follow the rules exactly because they know that to break the rules is to break the fundamental expectation of their system which immediately throws them back into the speculation/gambling camp. Oh by the way, casino owners do not gamble; they trade. Think about that too…
3) True systems can be rigorously forward and back tested and withstand shifts in the market, or at least behave more or less as expected as the market switches between trending and non-trending, high volatility and low volatility.
4) Real traders take every trade, even when their systems are getting a hammering. Why? Because they know that the next trade could be the turn around, and that their system can weather the storm. Again, to tinker with the system is to immediately be back to speculating and gambling.
5) All systems experience drawdown. Real traders know this, and they weather it without emotion. You can be flat or in drawdown for an extensive period, but they keep on following the rules. It’s a part of the business.