Archives of “Investment” tag

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Warren Buffett: Markets are like sex

  
  Education
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There’s nothing like getting a big bang for your buck, and no one knows that more than billionaire investor Warren Buffett.

The 83-year-old founder of Berkshire Hathaway, whose investments have consistently beaten the stock market over the past 50 years, shared a few tips in this year’s annual letter to shareholders, including comparing the stock market with sex.
Mr Buffett said new investors tend to buy shares when the markets are rising and optimism is high, only to get disillusioned when prices fall.
Quoting the late money manager Barton Biggs, whose attention to emerging markets in the 1980s marked him as one of the world’s first and foremost global investment strategists, Mr Buffett added: “A bull market is like sex. It feels best just before it ends.”

He advised investors to “keep things simple” by “accumulating shares over a long period, and never sell when the news is bad and stocks are well off their highs”.

20 Naked Truth For Traders

  
  Education
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1.    You have to have passion for learning to trade; passion is the energy that you need to take you to your goals.

2.    You have to have the perseverance to keep going after you want to give up.  90% of new traders quit when they were very frustrated while 100% of successful traders didn’t quit until they reached their goals

3.    New traders spend too much time looking for what to trade instead of focusing on who they are as traders.  You have to know who you are as trader first then you can start building your trading system.

4.    Traders have to be able to manage their stress by trading inside their current comfort zone. Traders have to grow themselves and trade size step by step.

5.    The vast majority of new traders fail simply because they did not do their homework before they started trading.

6.    A trader has to build a trading system that matches their own personality and risk tolerance levels.

7.    A trader that chooses to be master a specific type of trading method or trading vehicles has a much better chance of success than the traders that just dabble in many different things and never make much progress.

8.    A trader has to write a good trading plan while the market is closed to guide their trading while the market is open. (more…)

Trading happiness

  
  Education
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“I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; if they are going for me, I keep them.”

Paul Tudor Jones

A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does damage to the pocketbook and to the soul.”

Jesse Livermore

10 Friends & 10 Enemies of Traders

  
  Education
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A Trader’s 10 Best Friends

  1. Studying the markets to understand what works. $Study
  2. You are comfortable with uncertainty. ????
  3. Being optimistic about winning in the long term. #Winning
  4. You manage risk very carefully on each trade. #RiskofRuin
  5. Thinking in probabilities and asymmetrical trades. #RiskReward
  6. Following your trading plan. #Discipline
  7. Accepting losses. #StopLoss
  8. Letting winners run. #TrendFollowing
  9. A plan on exactly how you will trade. #TradingPlan
  10. A robust trading system. #EDGE

A Trader’s 10 Worst Enemies

  1. Scared to enter a trade.#Fear
  2. Feeling the need to be right on every trade. #Pride
  3. Entering a trade too late or taking profits too soon. #Impatience (more…)

5 Market Insights from Paul Tudor Jones

  
Analysis, Education
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Paul Tudor Jones is one of the most emblematic figures in the hedge fund industry. His best percentage returns happened during severe market corrections: 126% after fees in 1987 when U.S. markets lost a quarter of their market cap in one day. 87% in 1990 when the Japanese stock market plunged. 48% during the tech crash of 2000-2001. He returned 5% in 2008. His funds have underperformed in the past 8 years. He charges 2.75% management fee and 27% performance fee, which significantly above the industry average of 2 and 20.

Outside of financial markets. PTJ founded the Robin Hood foundation, which attempts to alleviate problems caused by poverty in NYC.

The biggest conundrum when studying successful money managers is do you pay attention to what they are doing today or do you focus on what they were doing before they became widely popular, were managing a lot less money and had a lot higher returns?

Here PTJ talks about how new powerful trends often start – basically, a big price expansion from a long base.

The basic premise of the system is that markets move sharply when they move. If there is a sudden range expansion in a market that has been trading narrowly, human nature is to try to fade that price move. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.

PTJ on risk management

If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.

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20 Quotes From -Trading in the Zone :Mark Douglas

  
  Education
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1.) When it comes to trading, it turns out that the skills we learn to earn high marks in school, advance our careers and create relationships with other people, turn out to be inappropriate for trading.  Traders must learn to think in terms of probabilities and surrender all of the skills acquired to achieve in virtually every other aspect of life.

2.) Within 9 months of moving to Chicago, I had lost nearly everything I owned.  My losses were the result of both my trading activities and my exorbitant lifestyle, which demanded that I make a lot of money as a trader.

3.) You don’t need to know what’s going to happen next to make money.  Anything can happen.  Every moment is unique, meaning every edge and outcome is truly a unique experience.  The trade either works or it doesn’t.

4.) More or better market analysis is not the solution to his trading difficulties or lack of consistent results.  It is attitude and “state of mind” that determine his results.  A winner’s mindset means learning how to think in probabilities.

5.) The edge means there’s a higher probability of one outcome than another.  The greater your confidence, the easier it will be to execute your trades.

6.) Do you ever feel compelled to make a trade because you are afraid that you might miss out?

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Be Flexible-5 Points to Win in Trading

  
  Education
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Flexibility for the trader  to move with price action is the key to successful trading. You can be rigid with your rules and risk management but you must be flexible when it comes to how the future plays out in price action for any market or stock. It is not those that predict the future that make a lot of money in trading but those that react to what is actually happening that are able to profit from price action.

  1. The ability to change your mind and reverse your trade in the other direction when proven wrong  is a powerful trait.
  2. The ability to admit you are wrong and take your stop loss can save your account.
  3. Put your ego aside and look at what is happening not what you believe should happen.
  4. Trade price action not your opinions.

  5. Always realize the markets are bigger than you are, they are always right.

Trading Rules & A Trading Plan

  
  Education
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There is a saying if you do not know where you are going…how will you get anywhere. There is some what of an analogy with trading and having rules and a trading plan. When you follow trading rules which match your personality along with your trading plan, you are on a path to just let the probabilities occur. Every facet of your trading needs to be thought out. It is not easy developing a trading plan with rules…however once you have it in place & accept the fact that any trade is 50/50 & does not have to work…your edge over time could possibly provide you a rising equity curve.

When you have trading rules & you follow it……you reduce the anxiety and stress levels. You know you need to follow your plan because the only certainty when trading is complete uncertainty. If you think you know where any market is going and do not put on a protective stop…Good luck and would bet you will encounter a huge shock one day.

Part of your trading rules are what to buy or sell

How much to buy or sell

When to get out with a profit or loss… (more…)

George Soros- “The Master of Speculation”

  
  Education
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 sorosSoros: “The Myth”

Soros’ “The Alchemy of Finance” is a seminal investment book… it should be read, underlined, and thought out page-by-page, concept-by-idea. He’s the best pure investor ever… probably the finest analyst of the world in our time.”

-Barton Biggs

Soros: “The Reality”

“My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is B.S., I mean, you know the reason he changes his position in the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s his early warning sign.”

-George Soros’ son, Robert

George Soros on Himself

“My approach works not by making valid predictions but by allowing me to correct false ones.”

-George Soros

Soros and Exits

“When George is wrong, he gets the hell out. He doesn’t say, ‘I’m right, they’re wrong.’ He says, ‘I’m wrong,’ and he gets out, because if you have a bad position on, it eats you away. All you do is think about it — at night, at your home. It consumes you. Your eye is off the ball completely. This is a tough business. If it were easy, meter maids would be doing it.”

– Alan Raphael (Ex-Soros CIO)

 

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