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How To Run A Country — 10 Lessons

Marcus Tullius Cicero was marginalized in the Roman senate. Frustrated without real power, Cicero began to write about how government should be run. As Caesar conquered Gaul and subsequently crossed the Rubicon, plunging Rome into civil war, Cicero was writing some of great works of political philosophy. While an accomplished orator and lawyer, Cicero’s most important achievement was his political career and writings.

He asked questions that still resonate today: What is the foundation of a just government? What kind of rule is better? How should a leader behave?

At the time of his writings his political influence had declined. He wrote to a friend: “I used to sit on the deck and hold the rudder of the state in my hands; now there’s scarcely room for me in the bilge.”

“For those who will listen,” Freeman writes, “Cicero still has important lessons to teach. Among these are:

1. There are universal laws that govern the conduct of human affairs.

Cicero would never have thought of this concept of natural law in terms used later by Christians, but he firmly believed that divine rules independent of time and place guarantee fundamental freedoms to everyone and constrain the way in which governments should behave. As the American Founding Fathers, careful students of Cicero, wrote in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”

2. The best form of government embraces a balance of powers.

Even the most noble kings will become tyrants if their reign is unchecked, just as democracy will degrade into mob rule if there are no constraints on popular power. A just government must be founded on a system of checks and balances. Beware the leader who sets aside constitutional rules claiming the need for expediency or security.

3. Leaders should be of exceptional character and integrity.

Those who would govern a country must possess great courage, ability, and resolve. True leaders always put the interest of their nation above their own. As Cicero says, governing a country is like steering a ship, especially when the storm winds begin to blow. If the captain is not able to hold a steady course, the voyage will end in disaster for all.

4. Keep your friends close— and your enemies closer.

Leaders fail when they take their friends and allies for granted. Never neglect your supporters, but even more important, always make sure you know what your enemies are doing. Don’t be afraid to reach out to those who oppose you. Pride and stubbornness are luxuries you cannot afford. (more…)

Overconfidence & Greed

What most traders often don’t realize until it is too late is how quickly one can lose a lot of money in a single trade often with disastrous consequences.  More often than not this painful experience comes from poor risk management following a period of successful trading. It is natural of course. We are pattern seeking mammals and when something starts working for us we get confident in our abilities and quickly forget we know very little what the market or a given stock may do at any given moment. In short: We easily become overconfident.

It is after a period of successful trading that traders tend to loosen up on good intentioned rules of discipline. They start thinking in term of dollar signs as opposed to the trade discipline. In short they think they can fly. “Look how much money I would have made if I had traded x % of my portfolio”. Stop yourself right there. While it is tempting to play mind games like this no good will come of it. Why? Because you just stepped overtly into the realm of one of the greatest sins of trading:

Once you get greedy you will start abandoning necessary discipline. Nobody, I repeat nobody, no matter how smart they think they are has a fail proof system or process or secret trading technique that guarantees 100% success. I surely don’t. Neither does Goldman Sachs or anybody else. While there may be some HFT firms out there that are trying to algo their way to a perfect system I have news for you: You are not an HFT or an algo. You are an individual trader and as good as you may be: You will have losing trades, things will go against you and oddly enough this will happen when you are at your most vulnerable: When you are overconfident, greedy and overexposed. Something curious tends to happen though when the losing trade occurs:

Gorman & Kennedy, Visual Guide to Elliott Wave Trading-Book Review

First, what Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy (Bloomberg/Wiley, 2013) is not. It is not an Elliott wave primer. The authors direct the reader who knows nothing about wave patterns to the classic presentation by Frost and Prechter, available free online.

Instead, this visual guide shows how to actually use Elliott waves in trading, both as a stand-alone tool and, more perfunctorily, in combination with technical indicators. It also includes two chapters on incorporating Elliott waves into options trading strategies

Many of the Elliott waves the author illustrate (and naturally the illustrations are abundant) are of the “real world” vs. the “textbook” variety. That is, they are tricky to decipher even in hindsight. This difficulty has led many critics to claim that Elliott wave theory is useless in real time. In fact, the authors admit that “under the Elliott wave model, there is usually more than one valid wave count at any particular time” and that “sometimes these wave counts point in opposite directions.” (p. 195) (more…)

A Martial Arts And Strength Training Rant That Relates To Trading

I feel the need for a rant you lucky people. It comes out of my ‘strange’ experience of being a martial artist and trader. So here you are….

I read a strength training forum and over the last few months the same guy has kept saying: “I’m a martial artist would this be a good program for a martial artist”.

Every time he is told perhaps and then asked what he is hoping to achieve. People then spend time guiding him on a program.

Then a few weeks go by and he pops up in a new thread where there is a new interesting program with the question: “I’m a martial artist would this be a good program for a martial artist”.

In the meantime others pursuing athletic or martial advancement have reaped the rewards of following their programs.

The key point. Pick something and train it hard. Don’t debate it, change it, mess with it until you have trained the shit out of it. You haven’t earned the right. (more…)

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