Archives of “surprises” tag

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Market is like a woman

  
  Education
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One is amazed by the similarities between the market and the femme fatale. Especially when you continue to chase the market with expectations of a reversal that never comes.

The more you chase it, the more parabolically it goes up. No matter how you count or look at indicators and candles, it simply goes up. When you finally give up, that is when the market surprises you once more with a sudden reversal and drop of prices.

In same way, you chase the femme fatale and that keeps you hooked and brings you near self destruction and obsession. When you finally give up exhausted and frustrated, she gets back at you once again. Looking for her prey…

Quotes from :Dr Alexander Elder's best seller Trading For A Living

  
  Education
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Proper money management is essential for successful trading.

A disciplined trader cuts his losses short and outperforms a loser who keeps hanging on and hoping.

As soon as you buy, place a stop-loss order.

Greed and fear destroy traders by clouding their minds. The only way to succeed in trading is to use your intellect.

The goal of a successful trader is to make the best trades. Money is secondary. If this surprises you, think how good professionals in any field operate. Good teachers, doctors, lawyers, farmers and others make money – but they do not count it while they work. If they do, the quality of their work suffers.

Serious traders place stops the moment they enter a trade.

We all like to hope that a trade will succeed – and a stop is a piece of reality that prevents traders from hanging on to empty hope.

Learning to place stops is like learning to drive defensively.

A stop is not a perfect tool but it is the best defensive tool we have.

Peter Lynch

  
  Education
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Probably you have heard of Peter Lynch. But did you know that in 13 years, from 1977 to
1990, the Fidelity Magellan Fund he managed grew from $20m to a whopping $14b?!
One of his famous buy, Subaru, was already up twentyfold when he bought the stock and he made sevenfold after that.

Quotes from Peter are as follows:
“Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it.”

“If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them.”

“Investing without research is like playing stud poker and never looking at the cards.”

“Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they’re going to be higher or lower in two to three years, you might as well flip a coin to decide.” (more…)

Inexorable Change

  
  Education
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Since change is ubiquitous and permanent, we might as well become experts at adapting. We can get comfortable with change and look forward to its permutations and surprises. We can train ourselves to become adept at learning, unlearning, and relearning.

On the other hand, we don’t want to be whipsawed back and forth through too rapid repositioning. Nor do we want to keep switching methods and systems.  We need to find the balance between being steady and too speedy a responder. We need to comprehend that markets, like the ocean, have waves, tides, and tsunamis. Each needs to be handled differently.

We want to make change an acceptable reality rather than a soap opera. We need to be flexible and versatile. In being flexible we observe reality clearly and adjust our actions. In being versatile we utilize our trained ability to perceive and react effectively.

Volatility in markets can be embraced as opportunity or feared as danger. That shot of adrenaline you feel as you trade can be exciting or terrifying depending on how you view the situation. Interpretation is at the essential core of our trading.

A good way to start each trading day is by asking some questions: Where are the opportunities today? Are there any impending risks to my positions? Where might the opportunities or risks develop?

In the midst of unfolding turmoil or stagnant stalling, we need to distinguish between the fundamental and technical changes that are structural and therefore important and possibly extensive, and those that are merely headlines passing through and therefore only interesting and probably short lived.

In any event, accept whatever is happening, utilize your methods and guidelines, take a deep breath, and do your best. Remember, as it has been said, “All you can do is all you can do, and all you can do is enough.”

Blackstone's Byron Wien Discusses Lessons Learned in His First 80 Years

  
  Education
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Here are some of the lessons I have learned in my first 80 years.  I hope to continue to practice them in the next 80. 

  1. Concentrate on finding a big idea that will make an impact on the people you want to influence.  The Ten Surprises which I started doing in 1986 has been a defining product.  People all over the world are aware of it and identify me with it.  What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end.  If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.
  2. Network intensely.  Luck plays a big role in life and there is no better way to increase your luck than by knowing as many people as possible.  Nurture your network by sending articles, books and emails to people to show you’re thinking about them.  Write op-eds and thought pieces for major publications.  Organize discussion groups to bring your thoughtful friends together.
  3. When you meet someone new, treat that person as a friend.  Assume he or she is a winner and will become a positive force in your life.  Most people wait for others to prove their value.  Give them the benefit of the doubt from the start.  Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path.
  4. Read all the time.  Don’t just do it because you’re curious about something, read actively.  Have a point of view before you start a book or article and see if what you think is confirmed or refuted by the author.  If you do that, you will read faster and comprehend more.
  5. Get enough sleep.  Seven hours will do until you’re sixty, eight from sixty to seventy, nine thereafter which might include eight hours at night and a one hour afternoon nap.
  6. Evolve.  Try to think of your life in phases so you can avoid a burn-out.  Do the numbers crunching in the early phase of your career.  Try developing concepts later on.  Stay at risk throughout the process.
  7. Travel extensively.  Try to get everywhere before you wear out.  Attempt to meet local interesting people where you travel and keep in contact with them throughout your life.  See them when you return to a place. (more…)

How To Make Your Own Luck in Trading

  
  Education
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The only place luck has in trading is that you will hopefully be on the right side of unexpected moves due to surprises. In trading you should trade in such a way that good luck will benefit you and bad luck will not destroy you. In my trading luck has little to do with my profits. I trade when the probabilities are on my side based on what the chart is saying about the current action of buyers and sellers in a stock. New traders hoping for luck belong in Las Vegas not the stock market. Trade the trends, play the odds, manage the risk, have faith in yourself that you have the discipline to trade your winning plan.

  1. I do not trade on luck I trade with probabilities being on my side.
  2. I manage my risk carefully so bad luck on one trade does not blow up my trading account.
  3. I trade in the direction of the markets current trend to enable me to stay on the right side of strong moves.
  4. I trade in the direction of the markets current trend so the odds are on my side of being right.
  5. I buy the strongest stocks  and sell short the weakest stocks.
  6. When I am wrong I do not hope for luck I just get out of a losing trade.
  7. When I buy options I buy the in the money options with the odds in my favor not the far out of the money ones that require some luck.
  8. I primarily buy options instead of selling them so I can get big moves for small fees instead of small fees for big risks.
  9. I only risk 1% of my capital per trade so I do not blow up my account with a string of bad trades.
  10. I trade with confidence in my myself and my method not hoping for luck.

Byron Wien's Lessons Learned

  
  Education
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I was scheduled to speak about the world outlook at an investment conference recently and shortly before my time slot the conference organizer said the audience was more interested in what I had learned over the course of my career than what I had to say about the market.  I jotted a few notes down and later expanded and edited what I said that day. I have since been encouraged to share my thoughts with a broader audience.

Here are some of the lessons I have learned in my first 80 years. I hope to continue to practice them in the next 80.

    1. Concentrate on finding a big idea that will make an impact on the people you want to influence.  The Ten Surprises, which I started doing in 1986, has been a defining product.  People all over the world are aware of it and identify me with it.  What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end.  If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.
      1. Network intensely.  Luck plays a big role in life, and there is no better way to increase your luck than by knowing as many people as possible.  Nurture your network by sending articles, books and emails to people to show you’re thinking about them.  Write op-eds and thought pieces for major publications.  Organize discussion groups to bring your thoughtful friends together.
        1. When you meet someone new, treat that person as a friend.  Assume he or she is a winner and will become a positive force in your life.  Most people wait for others to prove their value.  Give them the benefit of the doubt from the start.  Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path. (more…)

        Byron Wien’s 20 Rules of Investing & Life

          
        Education, Life
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        MUST READOutstanding list from a man who has accumulated much wisdom over the years:

         Lessons Learned in His First 80 Years

        1. Concentrate on finding a big idea that will make an impact on the people you want to influence. The Ten Surprises, which I started doing in 1986, has been a defining product. People all over the world are aware of it and identify me with it. What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end. If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.

        2. Network intensely. Luck plays a big role in life, and there is no better way to increase your luck than by knowing as many people as possible. Nurture your network by sending articles, books and emails to people to show you’re thinking about them. Write op-eds and thought pieces for major publications. Organize discussion groups to bring your thoughtful friends together.

        3. When you meet someone new, treat that person as a friend. Assume he or she is a winner and will become a positive force in your life. Most people wait for others to prove their value. Give them the benefit of the doubt from the start. Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path.

        4. Read all the time. Don’t just do it because you’re curious about something, read actively. Have a point of view before you start a book or article and see if what you think is confirmed or refuted by the author. If you do that, you will read faster and comprehend more.

        5. Get enough sleep. Seven hours will do until you’re sixty, eight from sixty to seventy, nine thereafter, which might include eight hours at night and a one-hour afternoon nap.

        6. Evolve. Try to think of your life in phases so you can avoid a burn-out. Do the numbers crunching in the early phase of your career. Try developing concepts later on. Stay at risk throughout the process. (more…)

        25 Unwritten Rules of Management

          
          Education
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        1. Learn to say, “I don’t know.” If used when appropriate, it will be often.
        2. It is easier to get into something than it is to get out of it.
        3. If you are not criticized, you may not be doing much.
        4. Look for what is missing. Many know how to improve what’s there, but few can see what isn’t there.
        5. Viewgraph rule: When something appears on a viewgraph (an overhead transparency), assume the world knows about it, and deal with it accordingly.
        6. Work for a boss with whom you are comfortable telling it like it is. Remember that you can’t pick your relatives, but you can pick your boss.
        7. Constantly review developments to make sure that the actual benefits are what they are supposed to be. Avoid Newton’s Law.
        8. However menial and trivial your early assignments may appear, give them your best efforts.
        9. Persistence or tenacity is the disposition to persevere in spite of difficulties, discouragement, or indifference. Don’t be known as a good starter but a poor finisher.
        10. In completing a project, don’t wait for others; go after them, and make sure it gets done.
        11. Confirm your instructions and the commitments of others in writing. Don’t assume it will get done!
        12. Don’t be timid; speak up. Express yourself, and promote your ideas.
        13. Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get it done.
        14. Strive for brevity and clarity in oral and written reports. (more…)

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