Investing & trading: April - June 2011 articles archive home
Don't work too hard
The notion of working ‘harder’ for a greater reward may apply in the job world, but in the world of trading, working harder, as in making more trades, can often result in losing more money.
Wednesday, June 29, 2011 ... more
To do it right
You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody. This is the life of a successful trader. Many aspire to this but few succeed. An amateur looks at a quote screen and sees millions of dollars sparkle in front of his face. He reaches for the money - and loses.
Monday, June 27, 2011 ... more
Dealing with surprises
Michael Masters, founder of Masters Capital Management LLC, achieved near rock star status in 2008, when he testified before the U.S. Congress on the impact of speculators on oil prices. In the following extracts from Masters’ interview with Jack Swagger in Stock Market Wizards he tells us how to deal with market ‘surprises’.
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Wednesday, June 22, 2011 ... more
Give yourself a chance
One of the biggest problems facing the novice investor is unrealistic expectations. Your head is in the sky and you dream about making thousands a day from the start. But this is probably not going to happen. Most traders begin their career by losing money.
Tuesday, June 21, 2011 ... more
How important's psychology?
Markets offer unlimited opportunities for self-sabotage, as well as for self-fulfilment. Acting out your internal conflicts in the marketplace is an expensive proposition. Traders who are not at peace with themselves often try to fulfil their contradictory wishes in their market. If you do not know where you are going, you will wind up somewhere you never wanted to be.
Tuesday, June 14, 2011 ... more
Best to avoid minefields
Have you heard the one about the poor guy who ends up lost in a minefield? Having no clue what to do, he prays, covers his eyes and walks a straight line. Miraculously, he survives. Brimming with confidence, he is convinced that if it happens again, he will employ the same technique to survive. You can figure out the rest of the story.
Tuesday, June 7, 2011 ... more
Don't bother
The popular advice, “do your homework” is totally misguided. How can I be so presumptuous as to criticize advice that sounds so plausible and is so widely espoused? First, because I’m limiting the meaning of the word “homework” to learning all you can about a particular stock. This type of research is mostly a waste of time.
Thursday, June 2, 2011 ... more
A final piece of advice
At the end of every interview with the Stock Market Wizards Jack Schwager would ask a final question along the lines of: Any last words? What lessons have you learned about investment? Any advice for novice traders? It was intended to extract the ultimate piece of investment advice.
Tuesday, May 31, 2011 ... more
A 7 point programme from Ben's IA
“I was a hit and miss investor with some successes and some huge flops,” Ben Stein has revealed at Yahoo!Finance. “But I was almost always in a state of frenzy. Fear and self-loathing about the stock market and my investments took all of the pleasure and much of the profit out of my investing. Many a night and day, I sat looking at my statements and beating myself to a pulp over my mistakes.”
Thursday, May 26, 2011 ... more
The price of being a super-sucker.
Jesse Livermore often talked about ‘suckers’. The worst being the ‘semi-sucker’ who was “the real all-the-year-round support of the commission houses. He lasts about three and a half years on average, as compared with a single season of from three to thirty weeks, which is the usual Wall Street life of a first offender. He knows all the don'ts that ever fell from the oracular lips of the old stagers - except the principal one ..."
Monday, May 23, 2011 ... more
As with tennis
In a lot of ways investing is like tennis, it’s often the player with the least mistakes who wins. Unless you know how to avoid the most common mistakes of investing, your portfolio’s returns won’t be anything to get excited about.
Tuesday, May 17, 2011 ... more
The simple things are so difficult to do
Taking the sure loss frees an investor from the Loss Trap. But, somehow, taking the sure loss always seems less attractive than hoping one's fortune will turn around. The solution is simple. It constitutes a fundamental law of speculation: cut your losses short. Unfortunately, the simple solutions are often the more difficult to follow.
Tuesday, May 10, 2011 ... more
Morningstar's investment tips
Morningstar’s analyst staff has enormous collective investment experience. In the final lesson of their stocks Investing Classroom, they boil down some of their most salient observations into 20 investment tips.
Tuesday, April 19, 2011 ... more
Waste of time or valid learning tool?
Most discussions on the value of paper trading have the participants divided into two camps: The one claiming it’s totally useless, the other that it’s indispensible. The scoffers point to the obvious limitations.
Tuesday, April 12, 2011 ... more
Bill O’Neil's advice
“When I started investing,” says William J O’Neil in his book How to make Money in Stocks, “I made most of the same mistakes you’ve probably made. But here’s what I’ve learned":
Monday, April 4, 2011 ... more
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