| 1. “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.” ~ Mark Twain 2. “The market can stay irrational longer than you can stay solvent.” ~ John Maynard Keynes. 3. “I never buy at the bottom and I always sell too soon.” ~ Baron Rothschild 4. “When the facts change, I change my mind. What do you do, sir?” ~ John Maynard Keynes 5. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” ~ Warren Buffett 6. “It is not our duty as speculators to be on the bull side or the bear side but upon the winning side.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 7. “The principles of successful speculation are based on the supposition that people will continue in the future to make the mistakes that they made in the past.” ~ Thomas F. Woodlock 8. “It never was my thinking that made the big money for me. It was always my sitting tight. Got that?” ~ Mr. Partridge in Edwin Lefevre’s Reminiscences of a Stock Operator 9. “They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 10. “Remember that prices are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don’t make a second unless the first shows you a profit.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 11. “A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocketbook and the soul.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 12. “If a man didn’t make mistakes, he’d own the world in a month. But if he didn’t profit by his mistakes, he wouldn’t own a blessed thing.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 13. “The man who is right always has two forces working in his favor – basic conditions and the men who are wrong. In a bull market bear factors are ignored.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator 14. [What advice would you give the novice trader?] – “First, I would say that risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.” ~ Bruce Kovner in Jack Schwager’s Market Wizards 15. “There is probably no class of trades with a higher failure rate than impulsive trades.” Jack Schwager in Market Wizards 16. [What is the most important advice you could give the novice trader?] – “Trade small because that’s when you are as bad as you are ever going to be. Learn from your mistakes.” ~ Richard Dennis in Jack Schwager’s Market Wizards 17. “The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” ~ Ed Seykota in Jack Schwager’s Market Wizards 18. “Charting is a little like surfing. You don’t have to know a lot about the phsyics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when its’s happening and then have the drive to act at the right time.” ~ Ed Seykota in Jack Schwager’s Market Wizards 19. “I have two basic rules about winning in trading as well as in life: (1) If you don’t bet, you can’t win. (2) If you lose all your chips, you can’t bet.” ~ Larry Hite in Jack Schwager’s Market Wizards 20. “Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers.” ~ Michael Marcus in Jack Schwager’s Market Wizards 21. “Lose your opinion – not your money” ~ Unknown |
Archives of “pocketbook” tag
rss3 Invaluable Quotes from Reminiscences of a Stock Operator
“A man must believe in himself and his judgment if he expects to make a living at this game. That is why I don’t believe in tips. If I buy stocks on Smith’s tip, I must sell those same stocks on Smith’s tip.”
“The recognition of our own mistakes should not benefit us any more than the study of our successes. But there is a natural tendency in all men to avoid punishment. When you associate certain mistakes with a licking, you do not hanker for a second dose, and, of course, all stock-market mistakes wound you in two tender spots – your pocketbook and your vanity.”
…“One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.”
21 Quotes for Traders
1. “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.” ~ Mark Twain
2. “The market can stay irrational longer than you can stay solvent.” ~ John Maynard Keynes.
3. “I never buy at the bottom and I always sell too soon.” ~ Baron Rothschild
4. “When the facts change, I change my mind. What do you do, sir?” ~ John Maynard Keynes
5. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” ~ Warren Buffett
6. “It is not our duty as speculators to be on the bull side or the bear side but upon the winning side.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator
7. “The principles of successful speculation are based on the supposition that people will continue in the future to make the mistakes that they made in the past.” ~ Thomas F. Woodlock
8. “It never was my thinking that made the big money for me. It was always my sitting tight. Got that?” ~ Mr. Partridge in Edwin Lefevre’s Reminiscences of a Stock Operator
9. “They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator
10. “Remember that prices are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don’t make a second unless the first shows you a profit.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator
11. “A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocketbook and the soul.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator (more…)
Speculation Defined
Graham and Dodd’s Definition of Speculation
Graham and Dodd’s Definition of SpeculationIn their 1934 classic text, Security Analysis, Benjamin Graham and David Dodd provided a general definition of speculation: “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”
By this definition, most people who buy stocks are speculators. We can attempt to sharpen Graham and Dodd’s definition by including time-scale. Speculators are not interested in putting their money into a stock or commodity for a long time. They want to see a good profit quickly – on a time scale of minutes to months. If their money does not quickly perform well in a situation, they move it into another situation.
In pursuit of greater gain, speculators take greater risks with their capital than people who put their money into Savings & CD Accounts.
Jesse Livermore’s Definition of Speculation
Jesse Livermore, the 20th century’s most (in)famous speculator provided his own definition of speculation – preceding Graham and Dodd’s by several years. In Reminiscences of a Stock Operator, under his pseudonym of Lawrence Livingston, he said: “The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest, but to profit by either a rise or a fall in the price of whatever he may be speculating in.” (more…)
Jesse Livermore : Trading Quotes
Speculating
If somebody had told me my method would not work I nevertheless would have tried it out to make sure for myself, for when I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.
Risk
If all I have is ten dollars and I risk it, I am much braver than when I risk a million if I have another million salted away.
Personality
Every stock is like a human being : it has a personality – a distinctive personality – aggressive, reserved, hyper, high-strung, volatile, boring, direct, logical, predictable, unpredictable. I often studied stocks like I would study people; after a while their reactions to certain circumstances become more predictable.
Loss
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.
Entry
When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.
General Stock Market
There is only one side to the stock market;….not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock market speculation