Investing & trading: July - September 2012 articles archive home
 
In reality
Try to count the number of traders over forty. You won’t find many. Partly this is because of mathematics. If the markets are mostly a zero-sum game, then the winners stick around and the losers find other things to do with their lives.
Tuesday, September 25, 2012 ... more
 
 
Extracts …
… from the Columbia Business School April 2012 newsletter:

The definition of a great investor is someone who starts by understanding the downside. You must make the judgment in advance as to how much downside risk you are willing to take. I knew that I could always survive the good days, but the critical element is to be able to survive when the market isn't doing well or the investment isn't performing.
Tuesday, September 18, 2012 ... more
 
 
Essential attributes
Leon Cooperman, spent nearly 25 years at Goldman Sachs, before starting his own fund, Omega Advisors, in 1991. According to a 2012 report from Forbes he's now worth $2 billion. When asked what makes a good analyst or portfolio manager, Cooperman listed 14 attributes he thinks are absolutely necessary.
Tuesday, September 11, 2012 ... more
 
 
As an individual investor …
… you’re not running a mutual fund that must own eighty or a hundred different names ... you’re free of the oversight of boards and committees ... you’re free to define yourself ...… and you’re free to approach trading through timeless truths.
Tuesday, September 4, 2012 ... more
 
 
Three Pervasive Myths …
… in the Trading World exposed by Brett N. Steenbarger:
Myth #1: Emotions are at the root of trading problems.
Myth #2: Anyone, with dedicated effort, can get to the point of trading for a living.
Myth #3: The main cause of trading failure is a loss of discipline.
Tuesday, August 28, 2012 ... more
 
 
What it takes
Charlie Munger on what it takes to be a good investor: “It is remarkable how much of a long-term advantage people have gotten by trying to be consistently not stupid, instead of trying to be very intelligent”
Tuesday, August 21, 2012 ... more
 
 
What luck?
Jesse Livermore was happy to put some of his successes down to luck. Of his 1915/16 comeback from bankruptcy, he said: “I was very lucky. I was rampantly bullish in a wild bull market. Things were certainly coming my way so that there wasn’t anything to do but to make money …"
Tuesday, August 14, 2012 ... more
 
 
Diagnostic tool
Instead of relying on historical patterns for mechanical trading signals, you may want to use them as indications of how markets tend to behave under a given set of conditions.
Tuesday, August 7, 2012 ... more
 
 
What not to do
Buy low, sell high! That’s the shortcut to a fortune right? Wrong! It is just one of the many loss-causing clichés that the crowd chants as they lose money year after year.

Tuesday, July 31, 2012 ... more
 
 
What not to do
Buy low, sell high! That’s the shortcut to a fortune right? Wrong! It is just one of the many loss-causing clichés that the crowd chants as they lose money year after year.
Monday, July 30, 2012 ... more
 
 
Patience is integral ...
... to the value approach on many levels. As Ben Graham wrote undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants.
Tuesday, July 24, 2012 ... more
 
 
More from Anand
Numbers frequently lie - especially in isolation. Say you spot a p:e ratio of eight. Sounds cheap! But is that industry's profitability rapidly deteriorating? Was there a one-time item that temporarily juiced the bottom line?
Tuesday, July 17, 2012 ... more
 
 
So which is it?
When asked to name the mistake he makes most frequently, Edwin Schloss confesses to buying too much of the stock on the initial purchase and not leaving himself enough room to buy when the price goes down. If it doesn’t drop after his first purchase, then he has made the right decision. But the chances are against him.
Tuesday, July 10, 2012 ... more
 
 
How others act
We overestimate our abilities, our uniqueness, and our objectivity, even more so when under emotional strain. We have all seen the studies: 90% of people say they are above average drivers. Rarely do people think those around them work harder or better than they do. And so on…
Tuesday, July 3, 2012 ... more
 
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