rss

GERALD M. LOEB on GAINING PROFITS BY TAKING LOSSES

One of the many books on my desk right now is a classic written over 70 years ago by the stock market legend Gerald M. Loeb.  Loeb was a well respected Wall Street broker, not because he possessed some magic investing genie lamp but because of the following nugget of wisdom, one of many from The Battle For Investment Survival in a section entitled Gaining Profits By Taking Losses:

Accepting losses is the most important single investment device to insure safety of capital.  It is also the action that most people know the least about and that they are least liable to execute.  I’ve been studying investments, giving investment advice and actually investing since 1921.  I haven’t found the real key yet and don’t ever expect to, as no one has found it before me, but I have learned a great many things.  The most important single thing I learned is that accepting losses promptly is the first key to success.
 

Some things never change.

Trading Wisdom

 

What I say to the youngling…
Pray for the best, plan for the worst and go about our everyday business

“It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.” – William O’Neil

“When asked if there was a technique for making money on the stock exchange, Nathan Rothschild said, “There certainly is. I never buy at the bottom and I always sell too soon.” – William O’Neil

“Only a fool holds out for the top dollars,” said Joe Kennedy, one-time wall street speculator and the father of former President John F. Kennedy. The object is to get out while a stock is up, before it has a chance to break. Gerald M. Loeb states, ” Once the price has risen into estimated normal or overvaluation areas, the amount held should be reduced steadily as quotation advance.” (At this point it’s all right to ask yourself, “Why didn’t I sell when it was going up and looked so strong?”)” — William O’Neil

“Another thing to bear in mind is this: Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally.” – Jesse Livermore