Bloomberg TV conducted an interview with Ken Rogoff in Hong Kong (the same way you land in New York before you take off in London via the now defunct Concorde) in which the Harvard professor recently made famous for his words of caution that overlevering sovereigns always eventually leads to economic slow down, financial collapse, and ultimately bankruptcy, warned, when discussing China real estate, that “you’re starting to see that collapse in property and it’s going to hit the banking system.” With this coming days ahead of the massive Agri Bank of China IPO, it is interesting just how much influence the person who has been warning all along that the world is headed on an unsustainable path will finally have, now that the permabullish cackle of the MSM punditry has finally been discredited as futures are about to reenter triple digit reality. Oh yes, and score one for Jim Chanos, and all those who have long been warning about the inevitable Chinese bubble pop. Additionally, in discussing the suddenly prevalent topic of perpetual stimulus, and particularly envisioning Paul Krugman’s thesis that the world will end unless another couple of trillion are thrown into the fire of irresponsible deficit spending, Rogoff says “I couldn’t disagree more… Just to keep drinking bottles of aspirin because you are worried you are going to get a headache, or it is going to turn into a migraine, it’s too much prophylaxis.”
Full clip although none of this is news:
I’m currently rereading “Complete Turtle Traders“ and if you’re not familiar with the story, I highly recommend this book. There aren’t many books that I reference often and this is one of them due to the psychological insight of trading and it’s impact on your performance. And what you’re going to read below is just a snippet from the first 27 pages of the book.
Richard Dennis is fast becoming one of my trading icons as I learn more about his attitude and methodology on trading and life. Here are a few quotes from the book that will offer some insight into what type of person and trader he was at that time:
His emotional attachment to dollars and cents appeared nonexistent.
He thought in terms of leverage.
You’re much better off going into the market on a shoestring, feeling that you can’t afford to lose.
Reacting to opportunities that others never saw was how he marched through life.
….you had to be able to accept losses both psychologically and physiologically.
I’m an empiricist through and through.
….the majority is wrong a lot of the time. The vast majority is wrong even more of the time.
He was an anti-establishment guy making a fortune leveraging the establishment.
Dennis read Psychology Today to keep his emotions in check and to remind him of how overrated intuition was in trading.
I think it’s far more important to know what Freud thinks about death wishes than what
Milton Friedman thinks about deficit spending.You have to have mentally gone through the process of failure.
He has the ability under tremendous pressure to stand there with his own money and pull the trigger when other people wilted.
When he was wrong, he could turn on a dime.
One man’s volatility is another man’s profit.
SUBJECT: What makes a frustrating market?
I wanted to end with a quote from one of the most famous Turtle Traders of all, Curtis Faith, that very much resonates with my methodology of zentrading. This comes from “Inside the Mind of the Turtles”which is another book I recommend. Do not buy his second book “Way of the Turtle”. It was absolutely horrible and very poorly written. I’m still reading his new book (very promising) and I’ll let you know how that one goes. Anyhow…here’s the quote and pay special attention to the phase in italics and if you found this post especially useful please retweet and share with your networks. I look forward to reading your comments and any particular insight you may have.
Winning traders think in the present and avoid thinking too much in the future. They look at the future as unknowable in specifics, but foreseeable in character. To win you need to free yourself and your thinking of outcome bias. It does not matter what happens with any particular trade.
10 losing trades + sticking to your plan = bad luck.
