October - December 2011 articles archive home
Do penguins have knees?
Why is it that when you transport something by car, it's called a shipment, but when you transport something by ship, it's called cargo?
Why is it that you sit in front of your TV but behind your computer?
Friday, December 30, 2011 ... more
It's different
“Some of the most highly educated professionals such as doctors, lawyers and engineers who are used to being first in their class - the best of breed in whatever they do - fail miserably as traders and investors.
Thursday, December 29, 2011 ... more
When a perfect score's not possible
Leonardo DaVinci once summed up his feelings thus: "I have offended God and mankind because my work didn't reach the quality it should have." Marie Curie, said, "I never see what has been done; I only see what remains to be done."
Wednesday, December 28, 2011 ... more
Trading plan
What markets are you going to trade? How will orders be entered? Will you scale into positions or put them on all at once? How will you exit losing trades? What should a business plan for traders include?
Thursday, December 22, 2011 ... more
Just a few emotions
The most common emotions discussed by traders are greed and fear. But, the actual array of emotions that they have to deal with is far more complex than that.
Wednesday, December 21, 2011 ... more
The conservative investor’s shoulda.
Capital markets provide three tools for investors to employ in generating investment returns: asset allocation, market timing and security selection.
Monday, December 19, 2011 ... more
Happy holidays
It’s easy to dismiss Christmas as humbug, just take a clear-eyed look at the way it’s celebrated. Folks who barely tolerate your presence during the rest of the year suddenly shower you with gifts ... colleagues who’ve been stabbing you in the back all year send you greeting cards ...
Thursday, December 15, 2011 ... more
What lynch looked for
From 1977 to 1990, Peter Lynch grew Fidelity’s flagship Magellan fund at an average rate of 29.2% per annum. Famous for preferring companies that had ‘business models he could draw with a crayon,’ Lynch encouraged investors to look for five things in a potential investment:
Wednesday, December 14, 2011 ... more
Old, but good rules
The following rules from Richard Rhodes are simple. Sticking to them is what’s difficult. In bull markets, be long. This may sound obvious, but how many of us have sold the first rally, believing the market’s moved too far, too fast?
Tuesday, December 13, 2011 ... more
Snap judgements
All too often in making a decision about someone or something we don’t use all the relevant available information; we use, instead, only a single, highly representative piece of the total.
Friday, December 9, 2011 ... more
Where money’s concerned
When people make financial decisions, their emotional, primitive brain is very much involved," says Camelia M Kuhnen, Assistant Professor of Finance at the Kellogg School of Management. "This is not just an intellectual experience."
Thursday, December 8, 2011 ... more
Dick Davis truisms
Forget about buying a stock at the bottom or selling it at the top. Yes, somebody does, but that elusive somebody will not be you. It is unrealistic to think that you’re smart or lucky enough to buy at the very bottom tick or sell at the very top.
Wednesday, December 7, 2011 ... more
Some Templeton rules
Fifteen of Sir John Templeton’s rules for investment success: # The challenge is not simply making better investment decisions than the average investor. The real challenge is making investment decisions that are better than those of the professionals who manage the big institutions. # Invest – don’t trade or speculate.
Tuesday, December 6, 2011 ... more
Second wind
Most of us feel as if we lived habitually with a sort of cloud weighing on us, below our highest notch of clearness in discernment, sureness in reasoning, or firmness in deciding. Compared with what we ought to be, we are only half awake.
Friday, December 2, 2011 ... more
What of?
What I’m lacking, really, is any sense of the parameters. As I understand it, a best-case scenario involves the Greeks doing what they’re told.
Thursday, December 1, 2011 ... more
How it started
I was nine years old, my father was reading the financial pages of the newspaper. And they didn't look like the comics or whatever.
Wednesday, November 30, 2011 ... more
Why small caps
Our strategy from the beginning has been to focus on areas where we believe we can have some advantage, where there is a greater prevalence of irrationality and higher likelihood of mispriced assets.
Tuesday, November 29, 2011 ... more
Worldly success ...
… measured by the accumulation of money, is no doubt a very dazzling thing; and all men are naturally more or less the admirers of worldly success. But though men of persevering, sharp, dexterous, and unscrupulous habits ...
Friday, November 25, 2011 ... more
Lunch money
Asked at a Berkshire Hathaway Annual Meeting how he knows "if a prospect has the proper attitude?” Buffett replied, “Well, you can always leave your lunch money on the desk and leave the office” The line got a big laugh. Over time, however, he has provided more useful clues.
Thursday, November 24, 2011 ... more
Dick Davis truisms
In these days of instant communication, you’re not likely to get advance or inside information; few do. What’s more, a stock may not respond to news the way you think it will. The only advance news that’s likely to be of trading value is that which is a complete surprise when it’s released.
Wednesday, November 23, 2011 ... more
The first time
Assuming you have taken the necessary steps; have the money to lose, have a plan, can maintain discipline, and are willing to keep learning. The next step is to make your first trade. What you do after that depends on you and your ability to absorb and react to feedback.
Tuesday, November 22, 2011 ... more
Slowly, but surely
And the prophecy I make is this. To nine out of ten of you the choice which could lead to scoundrelism will come, when it does come, in no very dramatic colours. Obviously bad men, obviously threatening or bribing, will almost certainly not appear.
Friday, November 18, 2011 ... more
An avaricious or keen desire for profits is one of the most prevalent causes of failure in speculation. This weakness is general among traders. They desire “just a little more ” profit.
Thursday, November 17, 2011 ... more
The same thing?
In both cases the investor is betting that expectations are “too low” and will increase with the passage of time. Therefore, investing in either low expectations stocks (value) or high expectations (growth) is essentially the same bet.
Wednesday, November 16, 2011 ... more
Linda's rules
The key to success is in knowing yourself. If you don’t know who you are, the markets are an expensive place to find out. Have a plan, follow the plan. Keep records. Don’t be afraid to buy high and sell low.
Tuesday, November 15, 2011 ... more
In the struggle Friday, November 11, 2011
Is it true? Thursday, November 10, 2011
You have no doubt heard … Wednesday, November 9, 2011
Observations Tuesday, November 8, 2011
This calls to mind … Friday, November 4, 2011
One-sided Thursday, November 3, 2011
The trouble with EBITDA Wednesday, November 2, 2011
When & how Tuesday, November 1, 2011
Tribute to dogs Friday, October 28, 2011
Over-optimism explained. Thursday, October 27, 2011
Hard to beat Wednesday, October 26, 2011
The mood swings of investors … Tuesday, October 25, 2011
Whiskey Speech Friday, October 21, 2011
When to buy small-caps Thursday, October 20, 2011
Efficient enough Wednesday, October 19, 2011
Trading rules … Tuesday, October 18, 2011
Inequality Friday, October 14, 2011
Checklist Thursday, October 13, 2011
Bluntly stated … Wednesday, October 12, 2011
Some advice Tuesday, October 11, 2011
The poor man's son … Friday, October 7, 2011
John Hathaway ... Thursday, October 6, 2011
Highly successful individuals ... Wednesday, October 5, 2011
The Zurich Axioms Tuesday, October 4, 2011
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