Last night in London, Jim Rogers, chairman of Rogers Holdings, was interviewed by CNBC after US Fed announced its decision of leaving the rates alone.
Rogers is very critical to the Fed whose solution to the crisis has been “printing money”, a strategy that he does not see sustainable, “there will be no trees left” if the Fed keep on printing money. Rogers’s contempt to the US Fed is obvious, to a point that he stated that he isn’t paying attention to them at all. He thinks investors are better served to read and think and come up with their our opinions. “Sometimes I got it wrong, sometimes Igot it right” he said.
Commenting on the US Housing market, Rogers thinks that the market will stay low for many years to come to work out the inventories.
I found his answer to the recession question evasive at the best, for the CNBC anchor was looking for a “Yes” or “No” for an imminent double-dip recession. “We’re going to have another recession, I guarantee you… By 2012 say, it’s time for another recession.” – anybody could have said that, for recession comes and goes.
But, “The next time it’s going to be worse because we’ve shot all of our bullets,” he warned us. Rogers has been advocating investing in commodities.
A ‘Rock Hudson’ – a putt that looked straight, but wasn’t.
A ‘Saddam Hussein’ – from one bunker into another.
A ‘Yasser Arafat’ – butt ugly and in the sand.
A ‘John Kennedy Jr.’ – didn’t quite make it over the water.
A ‘Rodney King’ – over-clubbed.
An ‘O.J.’- got away with one.
A ‘Princess Grace’ – should have used a driver.
A ‘Princess Di’ – shouldn’t have used the driver.
A ‘Condom’ – safe, but didn’t feel very good.
A ‘Brazilian’ – shaved the hole.
A ‘Rush Limbaugh’ – a little to the right.
A ‘Nancy Pelosi’ – Way to the left and out of bounds.
A ‘James Joyce’ – a putt that’s impossible to read.
A ‘Ted Kennedy’ – goes in the water and jumps out.
A ‘Pee Wee Herman’ – too much wrist.
A ‘Sonny Bono’ – straight into the trees.
A ‘Paris Hilton’ – a very expensive hole.
A `Tiger Woods’ – Wrong Hole.
Often I think we overcomplicate trading. All this talk of risk management, money management, entries, exits etc ad nauseum can leave us not being able to see the wood for the trees.
It’s obvious that you need to cut your losses. If you let them run or get out of control your aren’t going to be in the business for long.
But there is another very good and often forgotten reason why you should not let your losses run that William O’Neill highlights:
O’Neill “letting your losses run is the most serious mistake made by almost all investors” simply because “if you don’t sell to cut your losses when you get into trouble, you can easily lose the confidence you’ll need to make buy and sell decisions in the future.”
But if you learn to do this then you stand some chance of doing this:
“Take your losses quickly and your profits slowly” because “your objective is not just to be right but to make big money when you are right.”
The first quote is another great one to heed. If we do and combine it with the second well…… we might just be able to make the big money once in a while.