October - December 2010 articles archive home
Something about John Templeton
In 1939, following Hitler’s invasion of Poland, John Templeton reportedly predicted that “if some of the companies that are worthless and losing money ever come back to life it will be during a major world war.” On that assumption he borrowed money to buy $100 of every stock trading below $1 on the New York and American stock exchanges. The trade got him a junk pile of some 104 companies, 34 of which were in bankruptcy, for a total investment of roughly $10,400.
Wednesday, December 15, 2010 ... more
Lynch's 25 golden rules
Peter Lynch closed his book, Beating the Street, with a list of what he called “25 golden rules for investing.” The following is an adapted version of those rules.
1: Investing is fun and exciting, but dangerous if you don't do any work.
2: Your investor's edge is not something you get from experts. You can outperform the experts by investing in companies or industries you understand ...
Tuesday, December 14, 2010 ... more
A wack in the head with a brick
"I was lucky," says Steve Jobs, "I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired."
Friday, December 10, 2010 ... more
Advice from a psychiatrist
It's freeing to admit that we are fallible and make mistakes. It's OK to make mistakes. It's not OK to lie about them and pretend they don't exist. In time, the truth will be revealed. How can people trust you if you lie to them? How can you learn to trust yourself if you continue to lie to yourself?
Thursday, December 9, 2010 ... more
If not entirely, still too much so.
In his book Toward Rational Exuberance, Mark Smith recounts how in 1969 Eugene Fama threw down the gauntlet to Wall Street fund managers, questioning whether it was possible to consistently outperform the market when risk was fully taken into account.
Wednesday, December 8, 2010 ... more
A few words from a consummate contrarian.
All stock-market investors embrace the motto ‘Buy low, sell high.’ Few act accordingly, however, for to do so would require that we go against the crowd, buying stocks that are out of favour and selling the market’s darlings. Whereas, by all accounts, powerful psychological forces prevent us from pursuing a contrarian investment strategy, although it consistently beats the market.
Tuesday, December 7, 2010 ... more
Mind your own business
To plan what a whole class of people ought to do is to feel one’s self a power on earth, to win a public position, to clothe one’s self in dignity. Hence we have an unlimited supply of reformers, philanthropists, humanitarians, and would-be managers-in general of society.
The danger of minding other people’s business is twofold. First, there is the danger that a man may leave his own business unattended to; and, second, there is the danger of an impertinent interference with another’s affairs ...
Friday, December 3, 2010 ... more
An awful lot like stock market trading
Andy Richardson is a professional gambler. Last year he wrote a piece at financial-spread-betting.com that looked at where punters go wrong when gambling on horses. He could just as easily have been talking about the stock market.
Thursday, December 2, 2010 ... more
Why it’s impossible to predict
In his book, The Guru Investor, John Reese argues that most investors – professional and amateur – underperform the market. He then asks the obvious question, which is, why? After all professional investors are, for the most part, intelligent people. Similarly, there are a lot of very smart amateur investors out there. So how can so many smart people fare so badly?
Wednesday, December 1, 2010 ... more
Advice from a hedge fund legend
Don’t be afraid of making mistakes. Good trading is a peculiar balance between the conviction to follow your ideas and the flexibility to recognize when you have made a mistake. This balance of confidence and humility is best learned through extensive experience and mistakes. “I’ve made so many mistakes”, says Steinhardt, “it makes me wise beyond my years.”
Tuesday, November 30, 2010 ... more
Climb to live longer.
In an experiment, led by Jay Kaplan at Wake Forest University School of Medicine, involving
macaques - small primates that live in a rigid social hierarchy – scientists found that those of high rank were less likely to develop heart disease, while those forced to struggle to maintain their status experienced a rise in arterial plaque even when fed a low-fat diet.
Friday, November 26, 2010 ... more
The morality of Wall Street
Perhaps one reason why there is so much disposition to question the morality of Wall Street and contrast it unfavourably with the morality of other business centres is the fact that in Wall Street probably to a greater extent than elsewhere the primal passions and instincts of acquisitiveness and self-preservation wear less disguise than they do in the other channels of industry and money making.
Thursday, November 25, 2010 ... more
Good news for small-fries
Investing is a peculiar business. The larger one gets, the worse one is likely to do. So this is a field where the individual investor has a huge leg up on the professionals and large investors. So, not only can The Dhandho Investor approach be applied by small investors, they are likely to get much better results from its application than I can get or multi-billion dollar funds can get. Temperament and passion are the key.
Wednesday, November 24, 2010 ... more
Advise that’s stood the test of time.
It is better to “average up” than to “average down”. This opinion is contrary to the one commonly held and acted upon; it being the practice to buy and on a decline buy more. This reduces the average. Probably four times out of five this method will … prevent loss, but the fifth time, meeting with a permanently declining market … will result in a heavy loss. Buying up is the reverse … that is to say, buying at first moderately and as the market advances adding slowly to the “line”.
Tuesday, November 23, 2010 ... more
Lacking in gregarious impulse
Gentlemen talk a great deal of patriotism. A venerable word, when duly practiced. But I am sorry to say that of late it has been so much hackneyed about that it is in danger of falling into disgrace. The very idea of true patriotism is lost, and the term has been prostituted to the very worst of purposes. - Robert Walpole
Friday, November 19, 2010 ... more
It's always been hard
Nothing is more difficult, I truly belief, than consistently and fairly profiting in Wall Street. Yet, into this field the outsider turns for quick and easy profit, or a high income, or a haven of safety. On average he gives it less thought than most of his activities, and he is usually careless as to whom he consults or through whom he deals. Frequently he fails to distinguish between results obtained by chance and those secured through knowledge.
Thursday, November 18, 2010 ... more
Don't try get all the right answers.
The analogy with the stock market is obvious. You make more money if you explicitly accept error and avoid trying to make perfect predictions that are diagnostic of some non-existent rule that you believe in
Wednesday, November 17, 2010 ... more
From Puggy's short remark
The late Puggy Pearson was a professional gambler with a 5th grade education, who nonetheless became legendary in poker, and other gambling circles, because of his undeniable skill in a game that involves a high degree of chance.
Tuesday, November 16, 2010 ... more
If there is no heaven for you. Friday, November 12, 2010
Today's perfect contrarian Thursday, November 11, 2010
Money types Wednesday, November 10, 2010
Is this a good time to buy AltX? Tuesday, November 9, 2010
Why we fear the wrong things Friday, November 5, 2010
Trust your intuition Thursday, November 4, 2010
Less is probably better Wednesday, November 3, 2010
Traits of great investors Tuesday, November 2, 2010
The onboard computer & pilot Friday, October 29, 2010
To neither a gambler nor a holder-on be Thursday, October 28, 2010
Why Bears seem smarter. Wednesday, October 27, 2010
Lessons from the Flash-Crash Tuesday, October 26, 2010
Then, as now Sunday, October 24, 2010
Blue Label Telecoms Sunday, October 24, 2010
Don’t wait to do something worthwhile Friday, October 22, 2010
Your problems are your own. Thursday, October 21, 2010
Gold: Where to next? Wednesday, October 20, 2010
Bits of advice. Tuesday, October 19, 2010
That illusive thing Friday, October 15, 2010
Between theory and practice. Thursday, October 14, 2010
Why they shouldn’t be trusted. Wednesday, October 13, 2010
Distinguishing the overlooked from the lacklustre Tuesday, October 12, 2010
Unfounded fears Friday, October 8, 2010
Energy , intellect, emotion & time Thursday, October 7, 2010
The big lie Wednesday, October 6, 2010
PIck of the advise from 150 experts Tuesday, October 5, 2010
Don't wait for it to happen. Friday, October 1, 2010
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