Investing & trading: January - March 2011 articles archive home
For no other reason
Yet professionals can, and, of course, do make mistakes. When they buy a stock and it doesn’t go up, even if it doesn’t go down, that’s wrong enough for them, simply because it did not perform as expected. The professional reasons that the stock went against his judgement, so he sells it. And … knowing that losses are inevitable, he seeks to minimize them at all times.
Tuesday, March 29, 2011 ... more
The single most important thing
William J O’Neil begins his book, 24 Essential Lessons for Investment Success, by asking the question: What is the most important thing an investor should know?
Wednesday, March 16, 2011 ... more
Like buying groceries
Benjamin Graham is often referred to as the ‘father’ of value investing, an investment approach he began teaching at Columbia Business School in 1928.
Tuesday, March 15, 2011 ... more
What’s important is why.
When you think you’ve located a bargain you have to ask yourself the question, "Why me God? Why has God made this bargain available only to me?" You can answer it in terms of market mob psychology, or that you're the only one looking at it, but you must have some sort of rationale for why this bargain has come to you.
Tuesday, March 8, 2011 ... more
Discipline, not timing,
Jack Schwager wrote in Stock Market Wizards: for the period 1994-2000, “[Mark] Minervini's performance has been nothing short of astounding. His average annual compounded return has been a towering 220%.” In December last year Minervini was interviewed by Charles Kirk of The Kirk Report. Here are some extracts ...
Tuesday, March 1, 2011 ... more
Set up to fail
There is any number of reasons for failing in the markets. More often than not it’s due to an unwillingness to recognize the effort required, to put in the time to learn the lessons, or to accept failure as part of the game. Some traders avoid failure by quitting early. Others persevere but without real commitment. Some suffer so badly when they incur a big loss that they embark on a fruitless search for a process that will prevent it from happening again. Some experience such anxiety that they can’t function properly. Some simply go into denial, never confronting their real performance.
Thursday, February 24, 2011 ... more
Game theory
“There are two types of games,” says Peter Hupalo, “Winner’s games and Loser’s games, meaning that some games are not won, but rather, are lost. It is important to understand the distinction. Winner’s Games are those games whose outcome is largely determined by the actions of the winner. Loser’s Games are largely determined by the actions of the loser.
Wednesday, February 23, 2011 ... more
An odd duck's rules
By all accounts, a yellow sign on the road leading to David Dreman's vacation home sums up his investment philosophy. The sign shows four ducks - three walking in one direction, the fourth going the opposite way. Dreman is the odd duck, the consummate contrarian, who rose to fame in the 1990s, when the fund he began in 1988 amassed an impressive record.
Tuesday, February 22, 2011 ... more
Why be contrarian?
Research supports a contrarian approach. But, as Ben Graham said, it requires considerable will power to keep from following the crowd. And for those who are not convinced it’s the wrong thing to do Paul Merriman has compiled a check-list to help you ensure that you're doing so.
Thursday, February 17, 2011 ... 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.
Tuesday, February 15, 2011 ... more
Montier's Tao of Investing
To begin with Montier says it’s important to ask a question that doesn’t get asked often enough: What is the aim of investing? “The answer,” he says, “drives everything that follows, and Sir John Templeton put it best when he said: “For all long-term investors, there is only one objective – maximum total returns.”
Tuesday, February 8, 2011 ... more
Five ways of playing the game
Tim Bourquin, the co-Founder of says that after talking with a lot of successful traders in a number of different markets, he has found that they all have different ways of doing things. However, they all follow five rules without exception.
Tuesday, February 1, 2011 ... more
Advice on forecasts: Dont!
“The folly of forecasting is one of my pet hobby-horses,” says James Montier in The Tao of Investing, which he wrote while still with Société General. “I simply can’t understand why so many investors spend so much time engaged in an activity which has so little value, and so little chance of success.”
Wednesday, January 26, 2011 ... more
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