Stock Market Wisdom

Simon Gordon

Active member
126 1
‘It is an immutable law in business that words are words, explanations are
explanations, promises are promises – but only performance is reality.’

Harold Geneen, US entrepreneur


Legendary member
5,167 748

:idea: If at first you don't succeed, open a building society savings account. ( Anon )


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Wise men say: "Only fools rush in." The stock market is no place to make money.

A miracle is a miracle but fools believe it's a temporary divergence. And idiots think that's risk-free?

Smart Alec, the one many believe, tells you you can "Make money in your sleep (or dreams) by cutting profit and ride the losses.

"Run! Run! Run away from the stock market!" say the wise ones, "There is no such skill that can let you make a living from the stock market like selling bolts and nuts."

Simon Gordon

Active member
126 1
The more I learned about the market, the more I saw it was really about psychology. In fact, psychology is probably the best major for this business.
Susan Suvall

From: The Market Masters by Kirk Kazanjian

Simon Gordon

Active member
126 1
Trading is not about buying into companies. Trading is about making money.

One of the biggest mistakes most investors make is believeing they've always got to be doing something....the trick in investing is not to lose money....the losses will kill you. They ruin your compounding rate; and compounding is the magic of investing.

The more you learn about the markets and yourself, the more confident you become. The more confident you become, the more effective you are as a trader.

Trends become more apparent as you step further away from the chart.

Longevity in this business - I have seen it again and again - is measured by discipline.

The harsh reality of the markets is that, if you are a trader or investor, ultimately, you have only yourself to blame for the decisions you make with regard to your money. You can make losing decisions or winning decisions. It's your choice.

The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.

Risk no more than you can afford to lose, and also risk enough so that a win is meaningful.

From: Trend Following by Michael Covel

Simon Gordon

Active member
126 1
If you are unsure about position, just get out.

I have to believe a trade has at least a 75 per cent chance of being right or else I won't put it on.

You need to select a market that fits your personality because a market is a reflection of the people who trade it.

It is not return that matters but rather return relative to risk.

We can't control when acceptable opportunities appear, but we can certainly try to preserve our capital until those opportunities arrive.

Different market participants will do research of varying quality. The market price will reflect the average assessment of all investors. If you can do research that most other people do not, you might be able to discover something that most of the rest of the market doesn't know and benefit from that knowledge. There are a lot of things that I know about my companies that most other investors don't. Therefore, my evaluation of these companies is not going to be the same as theirs. Why then should a stock always trade at the right price level?

You have to be very decisive, extremely disciplined, relatively smart, and above all, totally independent.

One characteristic that I have repeatedly noticed in winning traders - and that is probably true of winners in any field - is that they are extremely confident.

If his system tells him to liquidate, he's out - no questions, no second-guessing, no qualifications.

The essence of discipline is that there are no exceptions.

The more variables you have, the greater the number of statistical artifacts that you're likely to find, and the more difficult it will generally be to tell whether a pattern you uncover actually has any predictive value.

Promising the result commits you to doing it and leaves you no alternative but to do it if you are going to live by your word. Letting others know that you have set a goal and are committed to achieving it makes it more likely you will acieve that goal, whether it is in the realm of athletics, trading, or something else.

From: Stock Market Wizards by Jack D. Schwager
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Wisdom emanates from within, whizzdom arrives from without.

Simon Gordon

Active member
126 1
The stock market offers direct, quantitative confirmation of exactly how much of a loser you are.

From: Dumb Money, Adventures of a Day Trader by J. Anuff and G. Wolf

Simon Gordon

Active member
126 1
Risk comes from not knowing what you are doing.

It is Buffett's emotional balance that, ultimately, gives him the objectivity that elevates and sustains his unusual approach to capital management above the average.

Buffett also protects himself from anxiety by employing very little debt in his company.

An investor will succeed by coupling good business judgement with an ability to insulate his thoughts and behaviour from the super-contagious emotions that swirl about the marketplace.

We find doing nothing the most difficult task of all.

The essence of Buffett's Circle of Competence lies in the capacity to do nothing when there is nothing to be done. If anything sits at the heart of illusory competence it is our compulsion to take control, to do something.

From: The Real Warren Buffett by James O'Loughlin


Junior member
21 3
The Universe is evil and it hates you. You can't list all the funky things that it can do to you.
-- Jerf []

"The market, we would find, was philanthropically inclined that morning; in fact, clamoring to increase the supply of collegiate pocket money, of which no intelligent undergraduate ever had a sufficiency of since the dawn of historic time."
-- Reminisces of a Stock Market Operator

'Every day and in every way, I am becoming better and better' - Emile Coué.

Q. Is there ever a light at the end of the tunnel?
A. Yes, as hard as it may be to imagine now, the goal here is to be able to look back years from now at the events of today and say it was a blessing in disguise, maybe even the best thing that has ever happened to you.

Q. How can that possibly be?
A. Unlike human death as discussed above, think of the debtor as a Phoenix. From your financial ashes you will be reborn. When you rebuild a new financial base old debts will be gone. Your spending habits will be smarter. In a short time you can become richer and stronger than before. You may become a six million dollar man! In the long run you will see that workouts and bankruptcies can really give the debtor a new lease on life.

Simon Gordon

Active member
126 1
You’re trading future utility and you’re trying to figure out how to anticipate the anticipators.
90% of the people in this business eventually lose money.

You learn to ski by skiing. You learn to trade by trading.

If Buffett can’t understand a business he has no way to measure its quality or its future - so he can’t value it.

A stock doesn’t know who owns it. You may have all these feelings and emotions as the stock goes up or down, but the stock doesn’t give a damn.

Low Stakes
Tourists - 30%
Hobbyists - 40%
Subsistence Players - 10%

High Stakes
Action Players - 2%
Breakeven - 10%
Winners - 2%

The market is the boss.

The market tells you everything.

You can observe a lot by just watching.

To take risk requires a willingness to go to the edge of the abyss and to act in line with your objectives without any guarantee or certainty about the outcome.

The tape is telling you a story. You have to figure it out.

Miller looks for businesses with sustainable competitive advantages; strong shareholder-orientated management; and a market position that enables them to play offence, not defence.

Remember there are only a limited number of shares available at a given price. Once those shares change hands, the prevailing price of the stock will change.
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