April - June 2011 articles archive home
Six simple questions
Fred Schwed Junior’s, book Where are the Customers' Yachts? has long served as a warning against the "kindergarten" that is Wall Street. Written in a satire-like tone, the book is not only great fun but contains many investment truths. Including the following quiz that asks would-be investors six questions.
Thursday, June 30, 2011 ... more
Don't work too hard
The notion of working ‘harder’ for a greater reward may apply in the job world, but in the world of trading, working harder, as in making more trades, can often result in losing more money.
Wednesday, June 29, 2011 ... more
To do it right
You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody. This is the life of a successful trader. Many aspire to this but few succeed. An amateur looks at a quote screen and sees millions of dollars sparkle in front of his face. He reaches for the money - and loses.
Tuesday, June 28, 2011 ... more
The deadliness of second-handers
If you look at people, they are paying the price and wondering for what sin and telling themselves that they’ve been too selfish. [But] in what act or thought of them has there ever been a self? What was their aim in life? Greatness - in other people’s eyes. Fame, admiration, envy - all that which comes from others. Others dictated their convictions, which they did not hold, but they were satisfied that others believed that they held them.
Friday, June 24, 2011 ... more
Role of luck
But does it help the investor to imply that the market is predictable and subject to unequivocal answers when the bum on the park bench probably has a good chance of being right as the savvy professional? I don’t think so. If nothing else, the market is confusing. Suggesting otherwise creates unrealistic expectations.
Thursday, June 23, 2011 ... more
Dealing with surprises
Michael Masters, founder of Masters Capital Management LLC, achieved near rock star status in 2008, when he testified before the U.S. Congress on the impact of speculators on oil prices. In the following extracts from Masters’ interview with Jack Swagger in Stock Market Wizards he tells us how to deal with market ‘surprises’.
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Wednesday, June 22, 2011 ... more
Give yourself a chance
One of the biggest problems facing the novice investor is unrealistic expectations. Your head is in the sky and you dream about making thousands a day from the start. But this is probably not going to happen. Most traders begin their career by losing money.
Tuesday, June 21, 2011 ... more
Not-to-do list
“It is the ‘stop doing’ list that may well be the more important of the two as a mechanism for allocating the most precious of all resources: time” says Jim Collins in his book From Good to Great. “Most of us lead busy but undisciplined lives. We have ever-expanding ‘to do’ lists, trying to build momentum by doing, doing, doing—and doing more. And it rarely works.
Friday, June 17, 2011 ... more
Media doesn't know either
After 40 years of commenting on the stock market, here is what Dick Davis has to say regarding the Media’s contribution to the investment game in his book, The Dick Davis Dividend.

Wednesday, June 15, 2011 ... more
How important's psychology?
Markets offer unlimited opportunities for self-sabotage, as well as for self-fulfilment. Acting out your internal conflicts in the marketplace is an expensive proposition.
Tuesday, June 14, 2011 ... more
Do something different
I know that on behalf of your elders and the entire nation, I'm expected to say I am sorry that the economy failed, the job market dried up, the housing market become uncertain — in other words, that we're handing you an unmitigated disaster.
Friday, June 10, 2011 ... more
Better off if insider trading was legal?
Earlier in the year John Tammy, a senior economic adviser to H.C. Wainwright, came out against a practice that he argued was harming both the economy and investors: the ban of insider trading.
Thursday, June 9, 2011 ... more
RTM: Where it goes wrong.
Here's what I think happens with many people, we look at a stock market chart. Our eyes draw the line from the starting point to the ending point. We notice that the chart goes up and down, but eventually it always comes back to that nice straight line in the middle of all the jagged ups and downs. Our common sense mistakenly calls this "mean reversion," and we think we are seeing something significant ...
Wednesday, June 8, 2011 ... more
Best to avoid the minefields
Have you heard the one about the poor guy who ends up lost in a minefield? Having no clue what to do, he prays, covers his eyes and walks a straight line. Miraculously, he survives. Brimming with confidence, he is convinced that if it happens again, he will employ the same technique to survive. You can figure out the rest of the story.
Tuesday, June 7, 2011 ... more
And hope for the best
The one talent which is worth all other talents put together in all human affairs is the talent of judging right upon imperfect materials, the talent if you please of guessing right.
Friday, June 3, 2011 ... more
Don't bother
The popular advice, “do your homework” is totally misguided. How can I be so presumptuous as to criticize advice that sounds so plausible and is so widely espoused?
Thursday, June 2, 2011 ... more
Corporate raider or just keeping management honest?
The "Icahn Lift" is the Wall Street catchphrase used to explain the upward bounce in a stock price that typically takes place when Carl Icahn starts buying into a company he believes is poorly managed.
Wednesday, June 1, 2011 ... more
A final piece of advice
At the end of every interview with the Stock Market Wizards Jack Schwager would ask a final question along the lines of: Any last words? What lessons have you learned about investment? Any advice for novice traders? It was intended to extract the ultimate piece of investment advice.
Tuesday, May 31, 2011 ... more
You’re not old … yet
Stanford University economist John B Shoven recently came up with an entirely new way of calculating when we reach the crest of that hill. Given the fact that we’re all in better shape and living longer, he argues that our true age should be determined not by years since birth but by years left to live.
Friday, May 27, 2011 ... more
A 7 point programme from Ben's IA
“I was a hit and miss investor with some successes and some huge flops,” Ben Stein has revealed at Yahoo!Finance. “But I was almost always in a state of frenzy. Fear and self-loathing about the stock market and my investments took all of the pleasure and much of the profit out of my investing. Many a night and day, I sat looking at my statements and beating myself to a pulp over my mistakes.”
Thursday, May 26, 2011 ... more
The only solution
Investment success takes talent, education, training experience, effort, devotion to the craft. Making money is work – and we don’t know how to do it. We realise that this is about other kinds of work. If we aren’t surgeons we probably won’t try to perform appendectomies. But investment fools us.
Wednesday, May 25, 2011 ... more
The price of being a super-sucker.
Jesse Livermore often talked about ‘suckers’. The worst being the ‘semi-sucker’ who was “the real all-the-year-round support of the commission houses. He lasts about three and a half years on average, as compared with a single season of from three to thirty weeks ...
Monday, May 23, 2011 ... more
Success: What it is and isn't Friday, May 20, 2011
What any damn fool should be able to see Thursday, May 19, 2011
The fewer mistakes the better Tuesday, May 17, 2011
Give me freedom or ... anarchy? Friday, May 13, 2011
Why a 'balanced' portfolio may not be the answer. Thursday, May 12, 2011
The durability of major trends Wednesday, May 11, 2011
The simple things are so difficult to do Tuesday, May 10, 2011
Better than pure reason Friday, May 6, 2011
The role of luck Thursday, May 5, 2011
1974 looks remarkably familiar Wednesday, May 4, 2011
Nature's not entirely to blame Friday, April 29, 2011
Not your ego Thursday, April 21, 2011
The uglier the better Wednesday, April 20, 2011
Morningstar's investment tips Tuesday, April 19, 2011
The future is uncertain, but ‘twas ever thus Friday, April 15, 2011
The value of talking heads Thursday, April 14, 2011
Wanna beat Nick the Greek? Wednesday, April 13, 2011
Waste of time or valid learning tool? Tuesday, April 12, 2011
The only problem. Friday, April 8, 2011
Does it matter at what age you start? Thursday, April 7, 2011
Don't ignore the bleeding Wednesday, April 6, 2011
O’Neil's advice Tuesday, April 5, 2011
Solely for money Friday, April 1, 2011
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