It has long been observed, casually, that the trends of hemlines and stock prices appear to be in lock step. Skirt heights rose to mini-skirt brevity in the 1920’s and in the 1960’s, peaking with stock prices both times. Floor length fashions appeared in the 1930’s and 1970’s (the Maxi), bottoming with stock prices. It is not unreasonable to hypothesize that a rise in both hemlines and stock prices reflects a general increase in friskiness and daring among the population, and a decline in both, a decrease. Because skirt lengths have limits (the floor and the upper thigh, respectively), the reaching of a limit would imply that a maximum of positive or negative mood had been achieved
Archives of “Education” category
rssRisk Management Game
A random person is pulled off the street and given $10,000 to trade. They have no prior experience which, on the bright side, means they have no bad habits, emotional baggage, or preconceived notions. Before trading they go through a five day crash course on market basics (order entry process, chart reading, pattern recognition, etc…). Suppose you are tasked with the responsibility of drafting a set of risk management rules which they are required to abide by. The objective is to make them survive as long as possible in the trading arena so they can learn as much as possible through first-hand experience.
What types of rules would you set?
The ideal approach of course is to structure a set of rules which makes it as difficult as possible to blow up the account while still leaving them open to accumulating profits. The goal isn’t so much helping them capture large gains as much as it is helping them survive. After learning how to survive, then they can modify their approach to being more aggressive and seeking larger gains.
Here are two of my top rules: (more…)
Oil stocks are cigar butts, basically.
European Union- This Picture Tells Everything
The issue with the love when it comes to trading
Canvas For Your Office
"Trading in the Zone".
Mera Bharat Mahan :For Rs.47000 only : 3 ,00,000 Farmers had committed Suicide
There's no perfect way to invest. Find what works for you & ignore everyone else
The first rule of investing is…that there are no rules. Seriously, NO RULES! With all apologies to Mr. Buffett, there are guidelines, suggestions and simple math, but no rules.
It doesn’t always seem that way. There is no shortage of talking heads (journalists, bloggers, analysts, financial advisors, etc.) telling you what to do with your hard-earned savings. But in the end it’s your money. You can invest it (or spend it) however you see fit.
- If you want to hold stocks if they hit Japan-like bubble valuation levels. You can do that.
- If you already moved 20% into cash in anticipation of a correction that never came. You can do that.
- If you are up to your eyeballs in entrepreneurial risk and want to hold other safe assets. You can do that.
- If your career is just getting started and you’re not ready to own stocks. You can do that.
- If you want to put 5% of your portfolio into a basket of cryptocurrencies. You can do that.
As Meb Faber writes: “Remember, when Mr. Market shows up at your door, you don’t have to answer….” That being said there are some simple things you can do to improve your financial life without messing with the stock market.
- If your employer offers a match for 401(k) contributions, get every penny you can.
- If choosing between two similar investment vehicles: choose the cheaper one.
- If someone ever says an investment can’t lose or is guaranteed. Walk the other way.
- If you have have a young family, buy some low cost, term life insurance.
- If you have high rate credit card, work to eliminate that debt ASAP.
Recognize Your Mistakes
“I believe that truth is healthy and that most people can get what they want if they understand what is true and learn how to successfully deal with it. But I recognize that some people have problems applying this to their and others’ mistakes and weaknesses. That is because there commonly exists a stupid paradigm that “successful” people don’t make mistakes and don’t have weaknesses, whereas the truth is that everyone makes mistakes and has weaknesses. I believe that most important difference between “successful” people and “unsuccessful” people is that the successful people recognize their mistakes so that they learn from them and they recognize their weaknesses so they develop strategies to get around them.”