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The Very First Stock Warren Buffett (And Other Famous Investors) Ever Bought

  
  Education

Everybody has to start somewhere.

It’s easy to look at investing “gurus” like Warren Buffett and Peter Lynch, and feel as if you could never hope to emulate their success.

But the Buffett’s and the Lynch’s of this world were once naïve newbies. In this post we’ll take a look at the very first stock Warren Buffett, Peter Lynch and other famous investors ever purchased.

We’ll look at what their investing rationale was and how it worked out for them. Then we’ll see what you can learn from their successes or mistakes.

Peter Lynch

What He Bought and Why: As a teenager in the 1950s, Peter Lynch worked as a golf caddy. While he was carrying bags and handing out putters, he used to make a mental note of the stocks he heard people talking about, and looked them up later on.

When he was in college and had some money to invest, he started researching the air freight industry and “thought this air cargo was going to be a thing of the future.” He put his first $1,000 investment into a company called Flying Tiger. (more…)

Nassim Taleb’s Risk Management Rules of Thumb

  
  Education
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Rule No. 1- Do not venture in markets and products you do not understand. You will be a sitting duck.

Rule No. 2- The large hit you will take next will not resemble the one you took last. Do not listen to the consensus as to where the risks are (that is, risks shown by VAR). What will hurt you is what you expect the least.

Rule No. 3- Believe half of what you read, none of what you hear. Never study a theory before doing your own observation and thinking. Read every piece of theoretical research you can-but stay a trader. An unguarded study of lower quantitative methods will rob you of your insight.

Rule No. 4- Beware of the nonmarket-making traders who make a steady income-they tend to blow up. Traders with frequent losses might hurt you, but they are not likely to blow you up. Long volatility traders lose money most days of the week.

Rule No. 5- The markets will follow the path to hurt the highest number of hedgers. The best hedges are those you alone put on. (more…)

Goals for Consistency

  
  Education
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Consistency, consistency, this is one of the most important quality I wanna achieve. Here I have a set of goals pertaining to consistency. I got the material from an article sometimes ago. I have no idea who is the author. Anyway, here is the abstract and I have added my own ideas.
I want to consistently..

  • Visualize myself in tune with the market

Seeing oneself in tune with the market and apart of the ebb and flow. Great athletes constantly visualize themselves performing at their peak. In trading, which is purely a mental game, is just as incumbent upon us to do this as well and even more often.

  • Be as professional as possible.

Trading is not a pastime activity. It has to be treated seriouly , and professionally. We have to do the best job ,possible leaving no regrets at the end of the day.

  • Record my trades for review and analysis

By recording our trades and thoughts, we allow ourselves to internalize the markets actions even more and objectively analyze our own actions.

  • Look to be the agressor and proactive

Looking for setups and taking a dynamic approach to the market is critical in succedding. Those that can consistently seek out great opportunities and then execute on them are usually rewarded.

  • Following my trading plan

Having a plan is important. Being able to execute the plan is the key to success. Stick to it.

  • Be patient and hit the same high quality spots

By executing on the same game plan, we remove a great deal of the emotional turmoil that trading can bring.

At last, consistency in our approach leads to consistency in our profits!

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