Investing & trading: January - March 2010 articles archive home
There are those who lack faith in the wisdom of crowds.
You never feel good about buying a great bargain. When you buy a great bargain, you're doing it with sweaty palms, you’re leaning against the crowd, engaging in contrary thinking, and you're pretty much alone. - Arnold Van Den Berg, Outstanding Investors Digest.
Tuesday, March 30, 2010 ... more
It’s less likely to turn out well if you don’t know when to get out.
“The Hunt silver debacle also provided the setting for my worst trade. My partner George Fawcett and I had become bullish on silver starting in June 1978, when it was trading around $5.00 an ounce.
Tuesday, March 16, 2010 ... more
A road map for choosing an investment philosophy.
Three aspects that will help determine an investment philosophy: the personal characteristics of an individual, their financial standing and the beliefs they had formed about the markets.
Tuesday, March 9, 2010 ... more
Investing in a world view: Convergent versus divergent trading
A world view primarily addresses the question, "Are financial markets and the world stable?" How managers generate returns is founded on their beliefs of stability and the speed at which prices adjust.
Wednesday, March 3, 2010 ... more
Do you really think you can beat the pros?
The difficulty for individual investors trying to beat the professionals is two-fold: firstly, they do not have the time, experience, resources or relationships; secondly, they’re risking their own money – which not only affects their judgement, but also doesn’t allow them to draw a salary during the bad times.
Tuesday, March 2, 2010 ... more
If only I had acted differently.
Want to check the quality of your foresight? Write down tomorrow's stock prices. Do that each day and check the accuracy of your predictions. “When I hear in my mind's ear a voice that says that the stock market is sure to zoom or plunge,” says Statman, “I activate my ‘noise-cancelling’ device rather than go online and trade.”
Tuesday, February 23, 2010 ... more
The delusion of knowledge: why more isn’t always better.
What return do you think a firm will earn next year? Not a clue? Last year it earned 38%, the year before 30%. Now what return do you think it might earn? See how easy it is to fall into the trap?
Monday, February 15, 2010 ... more
'74 Buffett
Buffett is like the legendary guy who sold his stocks in 1928 and went fishing until 1933. That guy probably didn't exist. The stock market is habit-forming: You can always persuade yourself that there are bargains around. Even in 1929. Or in 1970. But Buffett did kick the habit. He did "go fishing" from 1969 to 1974.
Monday, February 15, 2010 ... more
With apologies to those who are heartily sick of hearing them.
The most important quality for an investor is temperament, not intellect... You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.
Wednesday, February 10, 2010 ... more
Why it’s important to know how it can kill you.
Our number-one goal is, don’t lose it. Because, you can’t start over again if you don’t have anything to start with, and no one likes to go back to go. So the number-one rule, don’t lose the money.
Tuesday, February 9, 2010 ... more
The importance of knowing when to sell
We are expected to select stocks that will outperform the market, and we spend far too much time and effort on doing so. Our time is better spent on eliminating or rejecting stocks that will underperform.
Tuesday, February 2, 2010 ... more
Market risk is easier to embrace than avoid
“Trading is among the most challenging of any games that a person can learn,” claims Janice Dorn, a psychiatrist who actively trades.
Wednesday, January 20, 2010 ... more
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