- The tension of riding a profit or loss may be quite intense for some investors. By liquidating too early, they are relieved of the tension, and, therefore, the mere termination of this situation will have the same result as a positive experience. They will be more likely to behave the same way in future trades.
- Those who ride losses to unacceptably large amounts also tend to experience the positive effects of relief. Again the relief can serve to reward an otherwise inappropriate act. It’s like the man who, when asked why he kept banging his head against the wall, replied, “because it feels so good when I stop.”
Archives of “investors” tagrss
You can give anyone the best tools in the world and if they don’t use them with good money management, they will not make money in the markets….
We’re convinced that a person could make a profit simply by buying and selling the markets according to the dart board if they followed all the right things as far as money management is concerned.
Traders and investors spend all their time in search of the ultimate trading method. They have no clue that the road to stock market riches ultimately lies in sound money management.
- China turns tables on AAA debt time bomb nations (Bloomberg)
- Gold at new record high after Saudi reserves double (FT)
- Germany and France examine two-tier euro (Telegraph)
- So that’s why investors can’t think for themselves (WSJ)
- Failed AAA-deal rated Rembrandt spurs outcry (Bloomberg)
- Medvedev sees chance for new world order (FT)
- Amid the crisis, Wall Street touted BP stock (Reuters)
- Gold reclaims its currency status as the global economy unravels (Telegraph)
It’s just one quote from Buffett. He was at a 165 person Columbia University investing class, and one of the students asked him how to prepare for a career in investing.
…Buffett thought for a few seconds and then reached for the stack of reports, trade publications and other papers he had brought with him. (more…)
Make all your mistakes early in life. He says the more tough lessons you learn early on, the fewer errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you bad stocks.
Always make your living doing something you enjoy. This way, you devote your full intensity to it which is required for success over the long-term.
Be intellectually competitive. This involves doing constant research on subjects that make you money. The trick, he says, in plowing through such data is to be able to sense a major change coming in a situation before anyone else.
Make good decisions even with incomplete information. In the real world, he argues, investors never have all the data they need before they put their money at risk. You will never have all the information you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.
Always trust your intuition. For him, intuition is more than just a hunch. He says intuition resembles a hidden supercomputer in the mind that you’re not even aware is there. It can help you do the right thing at the right time if you give it a chance. In fact, over time your own trading experience will help develop your intuition so that major pitfalls can be avoided.
Don’t make small investments. You only have so much time and energy so when you put your money in play. So, if you’re going to put money at risk, make sure the reward is high enough to justify it.
1. Make all your mistakes early in life: The more tough lessons you learn early on, the fewer (bigger) errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you something.
2. Always make your living doing something you enjoy: Devote your full intensity for success over the long-term.
3. Be intellectually competitive: Do constant research on subjects that make you money. Plow through the data so as to be able to sense a major change coming in the macro situation.
4. Make good decisions even with incomplete information: Investors never have all the data they need before they put their money at risk. Investing is all about decision-making with imperfect information. You will never have all the info you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.
5. Always trust your intuition: Intuition is more than just a hunch — it resembles a hidden supercomputer in the mind that you’re not even aware is there. It can help you do the right thing at the right time if you give it a chance. Over time, your own trading experience will help develop your intuition so that major pitfalls can be avoided.
6. Don’t make small investments: You only have so much time and energy so when you put your money in play. So, if you’re going to put money at risk, make sure the reward is high enough to justify it.
“I made a picture in my mind of who I wanted to be, and then I lived into that picture.” – Arnold Schwarzenegger
Every person who has tried or read about body building, has probably already heard that quote. Some of the most successful people in the world became that way because they were able to visualize their success and were not afraid of doing hard work to get there. They knew that they could achieve their goals if they set their mind to it.
Unfortunately, investors tend to be the self-defeating type – they search for easy answers, easy stock picks, and they don’t visualize success in a way that makes their trading and investing truly rewarding. They are also quick to blame others or search for the easy road. That’s why you have hundreds of very expensive investment newsletters and advisories, thousands of mutual funds, and trading systems that are sold to investors even though over the long term none of them manage to beat the major market averages.
The lesson that Arnold offers is an important one – you have to visualize success and do the hard work it takes to get there. There are no compromises or short-cuts to that destination. This is especially true when investing as well as anything you try to achieve in life.
Freud’s psychiatric conclusions have largely been discredited but he rightly maintains praise for understanding the central role of metaphor and narrative in human thought. Professor Cowen HERE, is only the latest to build on this theme although importantly, he concentrates on the negative, blinding aspects of the tendency. Nowhere is this more clear than in the “stories” that surround investments.
Choosing a metaphor presupposes a conclusion. For instance, there’s no way to hear “the Chinese economy is a bubble” without unconsciously associating the country’s outlook with fragility and inevitable disappearance of a soap bubble. If we describe China’s GDP as similar to a hot air balloon on the other hand, our subconscious will immediately become more suceptible to the argument that upcoming government stimulus will right the economic ship. (You see what I did there – the use of the word “ship” is insidious.)
Good metaphors are a double-edged sword and their ubiquity in stock pitches suggests investors remain on their guard, never accepting one outright no matter how successfully it seems to communicates the situation.
Last week ,The epicenter of many of questions seems to be southern Europe, where Greece, Portugal, Spain and to a lesser extent the remainder of the so-called PIIGS (Portugal, Italy, Ireland, Greece and Spain) have flamed investor concerns that burgeoning public debt may significantly weaken investor demand for sovereign debt and exacerbate an already trouble budgetary crisis.
Many investors have taken to selling the euro is as a means by which to reduce exposure to these problem areas and/or speculate on one or more of these crises spiraling out of control.
-Just look at above chart :Weekly chart includes a powerful rally of Year 2009 and more recently and two-stage selloff, starting in the first half of December and picking up steam over the course of the past 3 ½ weeks as traders looked to capitalize on weakness stemming from the problems in Greece, Portugal and Spain.
Just watch 136 level.Three consecutive close below this level+ Weekly close will take to 131.70-130 level.
-If not breaks 136 & trades above 138 level will create buying upto 140-141 level.
-Best Strategy :Sell on Rise.
-Will update more very soon.
Updated at 13:10/8th Feb/Baroda
Michael Steinhardt was one of the most successful hedge fund managers of all time. A dollar invested with Steinhardt Partners LP in 1967 was worth $481 when Steinhardt retired in 1995.
The following six rules were pulled out from a speech he gave: