October - December 2009 articles archive home
The most important thing of all – staying in the game
The other smudged rectangle of paper in my wallet, the one that obscures the right-hand corner of my wife's picture, bears a series of cryptic numbers: 190,259,865; 281,175,544; and 90,915,674. The last number has a big black minus sign right after it. That's a cut-out from my daily portfolio run on the most disastrous day my hedge fund ever had.
Tuesday, December 15, 2009 ... more
Not funny ha-ha but funny uh-oh
Three econometricians went out hunting, and came across a large deer. The first econometrician fired, but missed by a meter to the left. The second econometrician fired, but missed by a meter to the right. The third econometrician shouted, "We got it! We got it!"
Friday, December 11, 2009 ... more
Ten CSFs for a start-up
By investing in sustainable companies early and holding for the long haul, Moritz and others at Sequoia have not only built personal fortunes, but have earned billions for their partners.
Thursday, December 10, 2009 ... more
Nothing ‘normal’ about markets
The Gaussian distribution keeps on reappearing throughout economic theories as a rule-of-thumb description of how markets behave; despite the fact that they behave madly far more often than the resultant models predict.
Wednesday, December 9, 2009 ... more
Buy when it’s scariest
Donald Cassidy, whose book ‘Trading on Volume’ was named investment Book of the Year by the 2002 Stock trader’s Almanac, advises being guided by five investing principles ...
Tuesday, December 8, 2009 ... more
The reason there’s so little common sense about.
There are huge efforts that do go into making people, to borrow Adam Smith's phrase, “as stupid and ignorant as it is possible for a human being to be.” A lot of the educational system is designed for that … for obedience and passivity …. to prevent people from being independent and creative. If you're independent-minded in school, you're probably going to get into trouble very early on.
Friday, December 4, 2009 ... more
Martin Whitman, the 85 year-old Chief Investment Officer of Third Avenue Fund, who once described it as “better than the toll booth on George Washington Bridge”, lost 45% of his fund in 2008.
Thursday, December 3, 2009 ... more
Careful what you read
Up until the last few decades, our opinion of the press was influenced by a mental picture of the newspaper business that we acquired from old movies.
Wednesday, December 2, 2009 ... more
A few truths
Investors will not wake up one day and realise that the stock you’re considering is too cheap. Stock price surges require some sort of stimulus, such as an unanticipated pickup in demand or a takeover bid.
Tuesday, December 1, 2009 ... more
Trust cows more than chemists
From the oyster to the eagle, from the swine to the tiger ... animals are the portrayal of our virtues and vices made manifest to our eyes, the visible reflections of our souls. - Victor Hugo.

Behold the turtle. He makes progress only when he sticks his neck out. - James Bryant Conant.
Friday, November 27, 2009 ... more
Intuition versus probability
The study of risk-decisions from the perspective of brain processes promises rewards. Recent experimental evidence points to the ability to predict another person’s behaviour as more helpful in reading markets than pure probabilistic thinking.
Thursday, November 26, 2009 ... more
Jim Simons
Few people have heard of James Simons, the American mathematician and edge fund manager who, last year, was estimated by Forbes magazine to be worth around $8.5bn. To what does Simons ascribe his success? “Luck,” he once told a gathering of potential investors.
Wednesday, November 25, 2009 ... more
More advice from Jim Cramer
Always wait thirty days after an earnings preannouncement (profit warning) before you buy. Nothing seems more tempting than to buy a stock after it's been completely poleaxed by an earnings shortfall preannouncement. Nothing, however, could be more foolhardy.
Tuesday, November 24, 2009 ... more
Nor life on a single hope
These reasonings are unconnected: "I am richer than you, therefore I am better"; "I am more eloquent than you, therefore I am better." The connection is rather this: "I am richer than you, therefore my property is greater than yours;" "I am more eloquent than you, therefore my style is better than yours." But you, after all, are neither property nor style.
Friday, November 20, 2009 ... more
A field guide to conspiracy theories.
Gary Weiss, a freelance writer based in New York, last week provided a field guide to the five most prevalent Wall Street conspiracy theories on thebigmoney.com. Weiss graded each theory on a sliding scale from 1 to 5, with 1 being “fugetaboutit” and 5 being “damn right”, based on, among other things, crowd appeal, and plausibility.
Thursday, November 19, 2009 ... more
The usual story
Your first trade made a small profit. The second, did even better. Your dream of being rich was coming to life. You thought of calling for a Lear Jet catalogue. But the next trade was a disaster, followed by another loser. When you asked around, you were told, "It's just a brief slump—those things happen from time to time." Unfortunately, the losing streak continued, and you had to throw in the towel.
Wednesday, November 18, 2009 ... more
Cramer’s 10 Commandments of Trading
Never turn a trade into an investment. I have seen myriad investors turn trades into investments, developing a rationale or an alibi to fool themselves that they are doing the right thing. That's because they don't make the distinction between a trade and an investment.
Tuesday, November 17, 2009 ... more
What constitutes truth?
I know that most men, including those at ease with problems of the greatest complexity, can seldom accept the simplest and most obvious truth if it be such as would oblige them to admit the falsity of conclusions which they have proudly taught to others, and which they have woven, thread by thread, into the fabrics of their life". - Leo Tolstoy
Friday, November 13, 2009 ... more
Are you good enough to play the game?
Presumably stock market traders and investors also form a bell curve of competence. A few are brilliant. The majority are average, and have stayed afloat because their good trades outnumber their bad trades, but have gone nowhere. A few survive by sheer luck.
Thursday, November 12, 2009 ... more
nothing beats price when it comes to forecasting
How would you like to be in showdown with the fastest gun this side of the Pecos? Just to make it interesting, give yourself a slight handicap: let your opponent begin with his six-shooter loaded, while allowing yourself to load up only after the other fellow shouts “Draw!”.
Wednesday, November 11, 2009 ... more
the qualities that make for a successful trader Tuesday, November 10, 2009
Is knowledge acquired at the cost of happiness? Friday, November 6, 2009
Survival of the richest Thursday, November 5, 2009
When good news turns out bad Wednesday, November 4, 2009
Only time will tell. Tuesday, November 3, 2009
The 4 hour work day Friday, October 30, 2009
Hennessy on emotionless investing Thursday, October 29, 2009
Selling something you don’t yet own Wednesday, October 28, 2009
Investment paradigms to avoid Tuesday, October 27, 2009
What is a good man? Friday, October 23, 2009
Investing or gambling? Thursday, October 22, 2009
The problem with fallacies Wednesday, October 21, 2009
Expectancy theory according to Tharp Tuesday, October 20, 2009
Doubt is healthy; It tests one's convictions. Friday, October 16, 2009
Q&A with the best of the turtles Thursday, October 15, 2009
No home advantage Wednesday, October 14, 2009
Spot the message Tuesday, October 13, 2009
The Argument from Design Friday, October 9, 2009
Ego, often the catalyst for failure Thursday, October 8, 2009
The random walk theory - again Wednesday, October 7, 2009
face it, a lot of stock market advice is bull Tuesday, October 6, 2009
Insights from the father of modern political theory Friday, October 2, 2009
Why too much of a good thing might not be good . Thursday, October 1, 2009
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