From $8 a Month to $20 Billion

“Twenty-five years ago, when Zong Qinghou was 42, he made his living selling soft drinks and popsicles to schoolchildren. He says he earned about $8 a month — less than a third of China’s average wage at the time — and was so broke that he once slept in a tunnel under the streets of Beijing rather than spend on a hotel.

“Today, Zong, 67, is still selling soda — and lots of other things — as the wealthiest man in mainland China, Bloomberg Markets magazine reports in its December cover package, “The World’s Richest People.” His net worth of $20.1 billion as of Oct. 5 ranks him No. 30 in the world…”

– Bloomberg, Zong Tops China Billionaires as Communist-to-Capitalist

The responsible trader puts risk control first. That means staying clearheaded in respect to potential outcomes, refusing to “drink the kool-aid” while everyone else chugs it.

Given the need for realism, though, it’s good to temper cynicism with awareness of what’s possible… the potential in what could happen, with hard work, if things really go right.

In that regard, extreme success outliers are not to be envied or copycatted — obviously one needs a lot of fortuitous circumstance (plus the hard work) to do what Zong did.

Instead, fat tail successes serve as a useful reminder that perhaps, just perhaps, outlandish aspirations are not so outlandish… and could even be modest in respect to what’s been done.

After all, if a man in China can go from making $8 a month at age 42, to being worth $20 billion at age 67, who is to say what you or I might achieve? 

The problem of Having too much

affluenza2Let me introduce you to some of the better -known victims of affluenza.I want to take you back to the year 1923 ,as a group of the world’s most suscessful businessmen met at the Edgewater Beach Hotel in Chicago for financial planning session.Present were :
The president of the largest independent steel company.
The greatest wheat speculator
The president of the New york Stock Exchange
A member of the President’s cabinet
The greatest bear on Wall Street
The president of the Bank of International Settlements
The head of the world’s greatest monopoly
Individually ,these men symbolized what the world  so frequently terms “success “.Collectively ,these men controlled more wealth then  there was in the U.S.Treasury.Twenty-five years later ,however their lives told a different story. (more…)

15 Points for Trading System & Money Management

1. Capital comes in two varieties: Mental and that which is in your pocket or account.
Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

2. “Markets can remain illogical longer than you or I can remain solvent”, according to our good friend, Dr. A. Gary Shilling.
Illogic often reigns and markets are enormously inefficient despite what the academics believe.

3. An understanding of mass psychology is often more important than an understanding of economics.
Markets are driven by human beings making human errors and also making super-human insights.

4. The market is the sum total of the wisdom … and the ignorance…of all of those who deal in it; and we dare not argue with the market’s wisdom.
If we learn nothing more than this we’ve learned much indeed.

5. The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t.
Do the trade that is hard to do and that which the crowd finds objectionable.
Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

6. There is never one cockroach: Bad news begets bad news, which begets even worse news. (more…)

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