Marc Faber has blunt words for Tim Geithner and the United States. If the nation was a corporation, the credit rating would be junk.
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5 Wisdom Quotes For Traders
- Risk Control -“Don’t concentrate too much of your money on one big trade or group of highly correlated trades. Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on.”
- Losing Streak – “You have to work very hard to restore that confidence and cutting back trading size helps achieve that goal.”
- “I don’t think you can consistently be a winning trader if you’re banking on being right more than 50% of the time. You have to figure out how to make money being right only 20%-30% of the time.
- These traders have tremendous commitment to the markets–to their craft, so to speak. They develop scenarios, reevaluate scenarios, collect information, and reevaluate that information. They constantly ask themselves: What am I doing right? What am I doing wrong? How can I do it better?
- “So many people want the positive rewards of being a successful trader without being willing to go through the commitment and pain. And there’s a lot of pain.”
How to survive any losing streak. The 3 pillars of dealing with losses.
How to stop overthinking everything
What is holding people back from the life that they truly want to live?
I’d say that one very common and destructive thing is that they think too much.
They overthink every little problem until it becomes bigger and scarier and it actually is. Overthink positive things until they don’t look so positive anymore.
Or overanalyze and deconstruct things and so the happiness that comes from just enjoying something in the moment disappears.
Now, thinking things through can be a great thing of course. But being an overthinker can result in becoming someone who stands still in life. In becoming someone who self-sabotages the good things that happen in life.
I know. I used to overthink things a lot and it held me back in ways that weren’t fun at all.
But in the past 8 years or so I have learned how to make this issue so small that it very rarely pops up anymore. And if it does then I know what to do then to overcome it.
In this article I would like to share 9 habits that have helped me in a big, big way to become a simpler and smarter thinker and to live a happier and less fearful life.
1. Put things into a wider perspective.
It is very easy to fall into the trap of overthinking minor things in life.
So when you are thinking and thinking about something ask yourself:
Will this matter in 5 years? Or even in 5 weeks? (more…)
Trader's Learning Curve is Steep
Those who asked why -1+1 may not be equal to 0. Answer lies in the concept of path dependence
Buffett's 2010 Letter To Shareholders
For those who care what the man whose corporate existence is intimately tied to the government’s bailout of the financial system, has to say, below we present Buffett’s 2010 letter to shareholders.
The only section that is relevant to us, and which continues to demonstrate why Berkshire is a walking moral hazard (contrary to his conedmnation of financial weapons of mass destruction), is the disclosure on derivatives.
Derivatives
Two years ago, in the 2008 Annual Report, I told you that Berkshire was a party to 251 derivatives contracts (other than those used for operations at our subsidiaries, such as MidAmerican, and the few left over at Gen Re). Today, the comparable number is 203, a figure reflecting both a few additions to our portfolio and the unwinding or expiration of some contracts.
Our continuing positions, all of which I am personally responsible for, fall largely into two categories. We view both categories as engaging us in insurance-like activities in which we receive premiums for assuming risks that others wish to shed. Indeed, the thought processes we employ in these derivatives transactions are identical to those we use in our insurance business. You should also understand that we get paid up-front when we enter into the contracts and therefore run no counterparty risk. That’s important.
Our first category of derivatives consists of a number of contracts, written in 2004-2008, that required payments by us if there were bond defaults by companies included in certain high-yield indices. With minor exceptions, we were exposed to these risks for five years, with each contract covering 100 companies. In aggregate, we received premiums of $3.4 billion for these contracts. When I originally told you in our 2007 Annual Report about them, I said that I expected the contracts would deliver us an “underwriting profit,” meaning that our losses would be less than the premiums we received. In addition, I said we would benefit from the use of float. (more…)
Three basic reasons why traders don't succeed
1) They are trading a market and time frame that lacks opportunity;
2) They are trading a method that does not possess an objective edge in the marketplace;
3) They have a promising market, time frame, and method, but are not executing it properly.
Of these reasons, #3 is the most frustrating for traders. They feel as though they have the tools to succeed, but they themselves get in the way of their own success. Many times this is because emotional factors interfere with sound decision-making.