April - June 2016 articles archive home
 
Technical analysis
Technical analysis began with simple enough concepts. It was about looking for directional trends in prices and divergences between related indexes. Experience told traders that when prices start moving in one direction, they are more likely to continue.
Thursday, June 30, 2016 ... more
 
 
A good trader
A good trader will focus on risk first - how much can be lost, rather than how much can be gained. If it is your goal to find winners, how do you act when you experience a big loss? It’s a shock. A big disappointment. It could even discourage you from trying again.
Wednesday, June 29, 2016 ... more
 
 
Brexit
Turns out more than a few British voters weren’t too sure what they were doing when they voted to leave the EU last week. "Even though I voted to leave, this morning I woke up and I just — the reality did actually hit me," one woman told ITV News. "If I'd had the opportunity to vote again, it would be to stay."
Tuesday, June 28, 2016 ... more
 
 
A little trick
From Joshua Brown, a little trick for Coping with a market downturn: Log into a brokerage account and go to the Orders screen. Pick five or six of the best stocks that you’ve missed out on – the ones that have always bothered you.
Tuesday, June 28, 2016 ... more
 
 
Patriotism
From The Religion of Patriotism by Gustave Hervé (1909): Flags are but emblems; and are worth something only in so far as they represent something worthy. What, after all, is one’s native country? Or what, in actual fact, do all these “fatherlands” consist?
Monday, June 27, 2016 ... more
 
 
Won't be so bad
We're not immediately delighted when our partner runs away with someone else, but in fairly short order we start to realize that he or she “was never really right for me" or that "we didn't have that much in common."
Friday, June 24, 2016 ... more
 
 
Obsolete
Not so long ago you would still get research reports punting the stocks of pay phone companies. They would invariably argue that these stocks were attractively “cheap” by traditional valuation measures, such as their price-to-earnings multiples or market capitalization-to-revenue ratios. On top of which there was usually something that was about to create “significant new opportunities”.

In time though the forecasts based on these expectations often turned out to be wildly off the mark and it would become clear that there was a good reason why these stocks were “cheap”.
Thursday, June 23, 2016 ... more
 
 
Scared money
You have probably heard professional traders warn about trading with “scared money.” According to Mark Douglas in The Disciplined Trader, “in the market the fear of losing one’s fortune is every bit as intense as the fear of losing one’s life from an attack by a wild animal.”
Wednesday, June 22, 2016 ... more
 
 
Limited
[There exists] a cognitive dysfunction wherein humans adhere to an ancient logic that has everything to do with survival and self-interest, but very little to do with allocating capital efficiently. Within this ancient logic is contained the fear of being inconsistent with a prior commitment, the fear of departing from a prior definition of self, and the discord attached to admitting failure
Tuesday, June 21, 2016 ... more
 
 
Open-minded
The worst trading I've observed of many traders has been the result of what could be called static reasoning. Static reasoning takes a variety of evidence, assembles the evidence into a conclusion, and then places trades based on that conclusion. Risk taking is often a function of one's degree of belief in that conclusion.
Tuesday, June 21, 2016 ... more
 
 
Better when dead
A news item that has gotten a lot of attention recently concerned an internal performance review of Fidelity accounts to determine which type of investors received the best returns between 2003 and 2013. The customer account audit revealed that the best investors were either dead or inactive.
Monday, June 20, 2016 ... more
 
 
Here's hoping
What holds true for the individual holds true for a society. It is never static; if it does not grow, it decays; if it does not transcend the status quo for the better, it changes for the worse. Often we, the individual or the people who make up a society, have the illusion we could stand still and not alter the given situation in the one or the other direction.
Friday, June 17, 2016 ... more
 
 
Jason's job
Jason Zweig, who writes the Intelligent Investor column in The Wall Street Journal, was once asked to define his job. Here is part of his answer:

My job, as I see it, is to learn from other people’s mistakes and from my own. Above all, it means trying to save people from themselves.
Wednesday, June 15, 2016 ... more
 
 
Risk
“There is always the risk: something is good and good and good and good, and then all at once it gets awkward.” – John Green

For most of us, risk is bit like happiness; easier to determine in a broad sense than to measure with any accuracy. You might have a pretty good idea when you’re happy and when you’re not, but would be hard-pressed to pin it down to the nearest decimal. Likewise, when you can’t sleep at night worrying about the market, you’ve most likely taken on too much risk. Question is: How much “too much”?
Tuesday, June 14, 2016 ... more
 
 
Buy-and-hold
The standard message behind the growing popularity of passive investing is that buying and holding a portfolio of passively-managed indices reduces market risk, costs less, and yields greater returns over time.

The formula looks like this: Diversification + Buy and hold = Less risk.
Tuesday, June 14, 2016 ... more
 
 
Thirteen
Superstitions surrounding the number 13 date back to at least 1700 BC. A longstanding myth is that that if 13 people dine together, one will die within a year. The myth derives from the Last Supper, when Jesus dined with the 12 Apostles prior to his death.
Monday, June 13, 2016 ... more
 
 
Creating wealth
Extracts of a letter written in 1784 by Benjamin Franklin to a friend:

The first Elements of Wealth are obtained by Labour, from the Earth and Waters. I have Land, and raise Corn. With this, if I feed a Family that does nothing, my Corn will be consum’d, and at the end of the Year I shall be no richer than I was at the beginning.
Friday, June 10, 2016 ... more
 
 
Horse racing like markets
“One of the great romantic myths of [horse] racing is that the players are a merry band of brothers united in their quest to smoke out the winner of each race,” says Daily Racing Form editor and well-known handicapper Steven Crist in his essay, Crist on Value.
Thursday, June 9, 2016 ... more
 
 
Dreman's rules
Throughout his book, Contrarian Investment Strategies: The Next Generation, David Dreman provides a number of rules for investing. Here are 10 of them:

1. Do not use market-timing or technical analysis. These techniques can only cost you money.
Wednesday, June 8, 2016 ... more
 
 
Trading by chance
When you read that Hetty Green opened her first bank account at eight and received much of her education reading the financial pages to her near-blind grandfather, that Warren Buffett did his first trade at 14, as did the ‘Boy Plunger’, Jesse Livermore, you start to wonder if there’s any hope of success for those of us who were struggling with our homework at that age.
Tuesday, June 7, 2016 ... more
 
An essential ingredient
In his book The Stock market Wizards Jack Schwager notes that one of the most strikingly evident traits among all the Market Wizards is their high level of confidence. Prompting him to ask, “Are they confident because they have done so well, or is their success a consequence of their confidence?”
Tuesday, June 7, 2016 ... more
 
 
Central Banks
Let’s start with central banks’ attempts to achieve monetary stimulus... When central banks want to help economies grow, they take actions such as reducing the interest rates they charge on loans to banks or, more recently, buying assets (“quantitative easing”).
Monday, June 6, 2016 ... more
 
 
The role of luck
Seven years ago, Robert Frank, an economist at Cornell, went on Fox Business to speak with host Stuart Varney about a New York Times column Frank had written. In it, Frank had argued that, “Contrary to what many parents tell their children, talent and hard work are neither necessary nor sufficient for economic success.”
Friday, June 3, 2016 ... more
 
Diversification
[I believe] many analysts blow out when they become fund managers because they do not have the conviction level that is essential to put on a big position.
Thursday, June 2, 2016 ... more
 
 
Like the flu
Because the polio virus doesn't change that much an immune system that sees polio once can recognize it for life. Influenza is different. It's always adapting.
Wednesday, June 1, 2016 ... more
 
Contrarians also fail
In his book, Investment Illusions, Martin Fridson quotes a trader friend as saying, “I gave up being a contrarian when I discovered that everyone else was one, too.”
Tuesday, May 31, 2016 ... more
 
 
Just follow the trend?
The problem with the doom-and-gloomers is that they have been locked into a bearish mind-set since 2008, and have missed out on one of the greatest bull markets in history.
Tuesday, May 31, 2016 ... more
 
 
Lessons learnt
Extracts from ‘Principles’ a paper by Ray Dalio in which he outlines the things he believes have made him successful in investing and in life
Monday, May 30, 2016 ... more
 
On being wrong
As abs whole lot of us go through life assuming that we are basically right, basically all the time, about basically everything - unconsciously assuming that we are very close to omniscient.
Friday, May 27, 2016 ... more
 
 
Why it may be best
Proponents of market timing can’t understand why anyone would adopt a buy and hold approach. Supporters of buy and hold regard market timers as a bunch of hopeless goons.
Thursday, May 26, 2016 ... more
 
2 disconnects
A 2 year study found that the way individuals and professionals made investment decisions that achieving both high returns and long-term objectives was nearly impossible.
Wednesday, May 25, 2016 ... more
 
 
Gym lessons
You can learn a great deal about investing from going to the gym. Most people go to the gym because they want to work out and stay healthy.
Tuesday, May 24, 2016 ... more
 
Lessons from the movies
In the classic film, Forrest Gump, the main character of the same name, played by Tom Hanks, has a few lessons for investors.
Tuesday, May 24, 2016 ... more
 
 
One liners
One liners from Jesse Livermore: Always sell what shows you a loss and keep what shows you a profit. Prices are never too high to begin buying or too low to begin selling.
Monday, May 23, 2016 ... more
 
Animal Farm Friday, May 20, 2016
A hedge? Thursday, May 19, 2016
Timeframe Wednesday, May 18, 2016
Bad advice Tuesday, May 17, 2016
Not knowing Tuesday, May 17, 2016
Trading aphorisms Monday, May 16, 2016
Only now Friday, May 13, 2016
Fear Thursday, May 12, 2016
Alone Wednesday, May 11, 2016
Bears thinking about Tuesday, May 10, 2016
The crash of '73 Tuesday, May 10, 2016
Walton's rules Monday, May 9, 2016
In the future Friday, May 6, 2016
Rumours Thursday, May 5, 2016
Like Hogwarts Wednesday, May 4, 2016
At Berkshire's AGM Tuesday, May 3, 2016
Index is best Monday, May 2, 2016
Not knowing Friday, April 29, 2016
Fred's advice Thursday, April 28, 2016
Freedom Wednesday, April 27, 2016
Vapid nonsense Tuesday, April 26, 2016
Expert advice Tuesday, April 26, 2016
Principles Monday, April 25, 2016
A great lie Friday, April 22, 2016
The Financial Media Thursday, April 21, 2016
Livermore Wednesday, April 20, 2016
Gambling, speculating & investing Tuesday, April 19, 2016
Speculation Tuesday, April 19, 2016
Social media Monday, April 18, 2016
Rebel, rebel Friday, April 15, 2016
More reasons not to Thursday, April 14, 2016
Anatomy of a crash Wednesday, April 13, 2016
Aesop's lessons Tuesday, April 12, 2016
Fairy tales Tuesday, April 12, 2016
Top 10 Monday, April 11, 2016
From Elon Musk Monday, April 11, 2016
The invisible foot Friday, April 8, 2016
Hard to believe Thursday, April 7, 2016
Invest in yourself Wednesday, April 6, 2016
Believing what ain't so Tuesday, April 5, 2016
Wrong Tuesday, April 5, 2016
One liners ... Monday, April 4, 2016
Social status Friday, April 1, 2016
disclaimer
Michel Pireu & Associates cc, the owners of this website, are active stockmarket traders. The company disclaims all liability for any loss, damage, injury or expense however caused, arising from the use of, or reliance upon, in any manner, the information provided through this service and does not warrant the truth, accuracy or completeness of the information provided. The company's permission is required to reproduce the contents in any form including, capture into a database, website, intranet or extranet.