Investing & trading: 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 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
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
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
From Puggy's short remark
The late Puggy Pearson was a professional gambler, lived in Las Vegas, had a 5th grade education, but nonetheless became legendary in poker, and other gambling circles, because of his undeniable skill at a game that involves a high degree of chance.
Tuesday, November 16, 2010 ... more
Is this a good time to buy AltX?
The ALSI has risen 22% in the last nine months; from 25 793 at close on the 5th February, to 31 456 last Friday. Which means it has risen 74% from the low of 18,066 it recorded on 17 November 2008. The AltX on the other hand has risen only 7% since the beginning of February this year and at 1 095 on Friday last week was still down 57% from the close of 2 544 on 17 November 2008.
Tuesday, November 9, 2010 ... more
Traits of great investors
"It's not about IQ, education, the books you've read, or the experience you've accumulated," Mark Sellers told a class of Harvard MBAs. 'If it was experience, then all the great money managers would have their best years in their 60s and 70s, but we know they don’t. Intelligence and learning are obviously necessary … but there are structural assets some possess that cannot be copied or learnt.
Tuesday, November 2, 2010 ... more
Neither a gambler nor holder-on be
“I have learnt to sell as easily as I buy,” says Marcus Padley. “I don't need to be in the stock market - I don't need the dividend income, I long ago got over the philosophy that you hold stocks forever or that you can't time the market - so I am often a 100% cash.
Thursday, October 28, 2010 ... more
Bits of advice.
Focus on what is Important and knowable … the quality of management ... the financial condition of a business, its competitive moats. As opposed to the direction of the market, interest rates and oil prices which are all important but, unknowable.
Tuesday, October 19, 2010 ... more
Distinguishing the overlooked from the lacklustre
John Neff was a contrarian and classic value investor who, unlike many of his philosophical and intellectual contemporaries, consistently passed over the big growth stocks in favour of inexpensive, under-performing ones with low price-earnings ratios and large cash dividends (as a cushion against market volatility).
Tuesday, October 12, 2010 ... more
Pick of the advise from 150 experts
Luke Johnson, who wrote a weekly investment column for the Sunday Telegraph for eight years, has chosen the following rules as his favourites from the hundreds that are supplied in the The Global Investor Book of Investing Rules, edited by Philip Jenks and Stephen Eckett.
Tuesday, October 5, 2010 ... more
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