Wisdom Quote

"America is the largest debtor nation in the history of the world..note, I said 'history' of the world, not just the world."

--Jim Rogers

Wisdom Quote

"Better to not be in a trade and wishing you were in one than to be in a trade and wishing you were out"

--Unknown

Wisdom Quote

"Making a few correct calls using only a bottom-up strategy may influence investors to think that they are great stock pickers.  In reality, it's more likely that they have just been on the right side of macro trends without realizing it, such as choosing stocks from a sector that was in favor."

--Fracois Trahan

from The Era of Uncertainty

by Francois Trahan and Katherine Krantz

Wisdom Quote

"It would be a serious mistake to think that all the facts that describe a particular investment are or could be known.  Not only may questions remain unanswered; all the right questions may not even have been asked."

--Seth Klarman

Margin of Safety

Wisdom Quote

"Little else is required to carry a state to the highest degree of opulence from the lowest degree of barbarism, but peace, low taxes, and tolerable administration of justice; all the rest being brought about by the natural course of things.  All governments which thwart this natural course, which force things into another channel, or which endeavor to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical."

--Adam Smith

Wisdom Quote

"If you want to change your experience of the markets from fearful to confident, if you want to change your results from an erratic equity curve to a steadily rising one, the first step is to embrace the responsitiblity and stop expecting the market to give you anything or do anything for you. ... Taking responsibility is the cornerstone of a winning attitude."

--Mark Douglas

Trading In The Zone

Wisdom Quote

 "Economic history is a never-ending series of episodes based on falsehoods and lies, not truths.  It represents the path of big money.  The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited."

--George Soros

Wisdom Quote

"If you don't know who you are, the stock market is an expensive place to find out."

--Adam Smith
The Money Game

Wisdom Quote

"For a lot of traders, it doesn't matter so much whether their first big trade is successful or not, but whether their first big profit is on the long or short side. Those people tend to be perennial bulls or bears, and that is very bad. Both sides have to be equally OK."

--Richard Dennis
Market Wizards

Wisdom Quote

"Who looks outside, dreams; who looks inside, awakes."

--Carl Jung

Trading To Know You're Alive

This is an excerpt from Picking Winners by Andrew Beyer. In this paragraph, Mr. Beyer is attempting to explain why someone would choose to be a professional horse handicapper and gambler. I'm sure he's reflected on this quite a bit because he dropped out of Harvard after nearly obtaining his undergraduate degree to pursue his passion of handicapping. Now that's a bold move to say the least. Here's the excerpt:

The capacity to enjoy: so few people have it. Most citizens live lives of such routine and drudgery and are so concerned about security that they cannot imagine how delicious uncertainty is. A gambler may have as many periods of pain and frustration as he does of exhilaration, but at least he knows he's alive.

I think most traders can relate to this. Please don't misunderstand, I'm not endorsing trading for the rush. Trading for the excitement and an adrenaline rush is a problem for many traders and I do not mean to imply anything positive about that problem. I think the above excerpt applies to the overall personality that most gamblers and traders have. You have to enjoy and thrive on uncertainty to make a living doing either.

I've talked to many traders who have been through many rough periods that make normal people wonder why someone would want to go through it. Their families wonder why they would suffer through months and months of losing to learn how to do something that may or may not work out. Many periods of pain, frustration and exhilaration, but at least traders know they're alive.

TLT

Weekly Wisdom Quote

"If you don't get what you want, it's a sign either that you did not seriously want it, or that you tried to bargain over the price."

--Rudyard Kipling

President's Day Quote

"Things may come to those who wait, but only the things left by those who hustle."

--Abraham Lincoln

Weekly Wisdom Quote

"There is a principle which is a bar against all information, which is proof against all arguments, and which cannot fail to keep a man in everlasting ignorance--that principle is contempt prior to investigation."

--Herbert Spencer

Weekly Wisdom Quote

"If I had been a professor, I would have let Mr. Bernanke pass his exams, but I would have told him never to become a central banker."

--Marc Faber
Barron's-January 18, 2010 issue

***Barron's witty reply to Mr. Faber was, "He would have told you never to become a professor."

Popular Post Replay: Market Wizards

This was one of the most popular posts from 2008. It was originally posted on October 19, 2008. The popularity of this post is due to it involving two things that are dear to most traders' hearts: 1) the book Market Wizards, and 2) Ed Seykota. Check it out.


**********************************************************************************Ah, yes...it's a classic and we all reference it as being one of the best trading books of all-time. Well, I recently began reading the book for the 2nd time, after reading Market Wizards, The New Market Wizards and Stock Market Wizards. This series of books is excellent and I would encourage anyone who is interested in trading or even an investor, to buy all of the books and read them.

Tonight, I was reading the classic "Ed Seykota" chapter and I was struck by his answer to what his views of fundamental analysis were as to his trading approach. Here is his answer (emphasis is mine):

"I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money."

If you aren't familiar with Mr. Seykota, you need to be. Check out his website, it's filled with wonderful information.

Good luck out there.

TLT

Weekly Wisdom Quote

"If you're not making mistakes, you're not trying hard enough."

Vince Lombardi

Weekly Wisdom Quote

"If you have a minute, I'll tell you how to make money in stocks. Buy low and sell high--now if you have five or ten years, I'll tell you how to tell when stocks are low and high."

--Jesse Livermore

Weekly Wisdom Quote

"The only conquests that are permanent and leave no regrets are our conquests over ourselves."

--Napoleon Bonaparte

Weekly Wisdom Quote

"Most of the time, we deal with ... obstacles by persevering. Sometimes we get discouraged and turn to inspirational writing, like stuff from Vince Lombardi: 'Quitters never win and winners never quit.' Bad advice. Winners quit all the time. They just quit the right stuff at the right time."

Seth Godin
the dip