"What a distressing contrast between the radiant intelligence of a child and the feeble mentality of the average adult."
Sigmund Freud
Nice trading quote
'A trader's mind operates constantly from early morning until the exhausted trader collapses in bed at night. The rut of an energy drain can go on unabated for years, like a constantly fast-idling car engine that sometimes races but never has the key turned off. The vast majority of thinking is detrimental to personal peace and profits in the market. Thoughts of the past are a waste. Most thoughts of the future are the same.'
Bill Williams
Bill Williams
"...we are explanation-seeking animals who tend to think that everything has an identifiable cause and grab the most apparent one as the explanation. Yet there may not be a visible because; to the contrary, frequently there is nothing, not even a spectrum of possible explanations. But silent evidence masks this fact.....we are too brainwashed by notions of causality and we think that it is smarter to say because than to accept randomness." -Nassim Taleb, The Black Swan
'Suppose two traders, A and B, who are alike in most respects except the amount of money they have. Suppose A has 10% less money but he initiates a trade first. He gets in earlier than B. By the time B puts the trade on, the two traders have exactly the same equity. The best course of action has to be the same for both of these traders now. Mind you, these traders have very different entry prices. What this means is that once an initiation is made, it does not matter at all for subsequent decisions what the entry price was. It does not matter. Once you have made an initiation, what your initiation price was has no relevance. The trader must literally trade as though he doesn't know what his initiation price is.'
William Eckhardt (Trend following trader)
William Eckhardt (Trend following trader)
'If our desire for protection from pain supersedes our desire to face what is true, we are doomed to live lives that attempt to limit or ignore change. And that's sure to hurt. Lots'.
David Harp and Nina Smiley, The Three Minute Meditator (2007)
David Harp and Nina Smiley, The Three Minute Meditator (2007)
'The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority “go with the flow,” either completely or partially.'
Jeremy Grantham
Jeremy Grantham
Too true.Nice quote.When one fund mangler(sic) goes down,they all go down.Ferru123 wrote:'The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority “go with the flow,” either completely or partially.'
Jeremy Grantham
74.5
“Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now.”
William Hutchinson Murray, The Scottish Himalayan Expedition (1951)
William Hutchinson Murray, The Scottish Himalayan Expedition (1951)
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olligeorge
- Posts: 9
- Joined: Mon May 25, 2009 10:11 am
A couple more:
"If you can see the bandagon, your to late!"
When asked the secret of his amazing success he replied "I always sell to early"
Good luck.
"If you can see the bandagon, your to late!"
When asked the secret of his amazing success he replied "I always sell to early"
Good luck.
'There is so much information that exists in the financial realm that it can be challenging to determine what information is good and what is bad. The real question is, what information serves your purpose, and what information does not serve your purpose? Irrelevant information is hard to ignore sometimes, especially if it is what your school, boss, or some other ‘expert’ has instilled in you. Is fundamental financial information good or bad, or is technical information good or bad? We all like to think that we think for ourselves, but it takes a courageous person to continually question their beliefs and knowledge and to admit how little they actually know.'
From http://www.michaelcovel.com/2012/05/05/ ... ntability/
From http://www.michaelcovel.com/2012/05/05/ ... ntability/
There is a Taoist story of an old farmer who had worked his crops for many years. One day his horse ran away. Upon hearing the news, his neighbors came to visit.
"Such bad luck," they said sympathetically.
"We'll see," the farmer replied.
The next morning the horse returned, bringing with it three other wild horses.
"How wonderful," the neighbors exclaimed.
"We'll see," replied the old man.
The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy on his misfortune.
"We'll see," answered the farmer.
The day after, military officials came to the village to draft young men into the army. Seeing that the son's leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out.
"We'll see" said the farmer.
"Such bad luck," they said sympathetically.
"We'll see," the farmer replied.
The next morning the horse returned, bringing with it three other wild horses.
"How wonderful," the neighbors exclaimed.
"We'll see," replied the old man.
The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy on his misfortune.
"We'll see," answered the farmer.
The day after, military officials came to the village to draft young men into the army. Seeing that the son's leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out.
"We'll see" said the farmer.
'Your money is at risk. No matter what you’ve put it in—stocks, bonds, derivatives, hedge funds, houses, annuities, even mattresses —there’s always the chance that you could lose it or miss out on a bigger opportunity somewhere else. Anyone who would tell you otherwise is either a fool or a huckster. Then there are those who do warn of risk but package it into a simple numerical measure that seems to put it within manageable bounds. They’re even more dangerous.'
Naseem Taleb and Bernoit Mandelbrot (from http://trendfollowing.com/whitepaper/fortune.pdf)
Naseem Taleb and Bernoit Mandelbrot (from http://trendfollowing.com/whitepaper/fortune.pdf)
By Howard Marks,
Author of The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
Accepting the broad concept of contrarianism is one thing; putting it into practice is another. On one hand, we never know how far the pendulum will swing, when it will reverse, and how far it will then go in the opposite direction.
On the other hand, we can be sure that, once it reaches an extreme position, the market eventually will swing back toward the midpoint (or beyond). Investors who believed that the pendulum would move in one direction forever -- or, having reached an extreme, would stay there -- are inevitably disappointed.
On the third hand, however, because of the variability of the many factors that influence markets, no tool -- not even contrarianism -- can be relied on completely.
Contrarianism isn't an approach that will make you money all of the time. Much of the time there aren't great market excesses to bet against.
Joel Greenblatt: I've put it this way: just because no one else will jump in front of a Mack truck barreling down the highway, doesn't mean that you should!
Even when an excess does develop, it's important to remember that "overpriced" is incredibly different from "going down tomorrow."
Markets can be over- or underpriced and stay that way -- or become more so -- for years.
It can be extremely painful when the trend is going against you.
Seth Klarman: This is where it is particularly important to remember the teachings of Graham and Dodd. If you look to the markets for a report card, owning a stock that declines every day will make you feel like a failure. But if you remember that you own a fractional interest in a business and that every day you are able to buy in at a greater discount to underlying value, you might just be able to maintain a cheerful disposition. This is exactly how Warren Buffett describes bargain hunting amid the ravages of the 1973 to 1974 bear market.
It can appear at times that "everyone" has reached the conclusion that the herd is wrong. What I mean is that contrarianism itself can appear to have become too popular, and thus contrarianism can be mistaken for herd behavior.
Finally, it's not enough to bet against the crowd. Given the difficulties associated with contrarianism just mentioned, the potentially profitable recognition of divergences from consensus thinking must be based on reason and analysis. You must do things not just because they're the opposite of what the crowd is doing, but because you know why the crowd is wrong. Only then will you be able to hold firmly to your views and perhaps buy more as your positions take on the appearance of mistakes and as losses accrue rather than gains.
Author of The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
Accepting the broad concept of contrarianism is one thing; putting it into practice is another. On one hand, we never know how far the pendulum will swing, when it will reverse, and how far it will then go in the opposite direction.
On the other hand, we can be sure that, once it reaches an extreme position, the market eventually will swing back toward the midpoint (or beyond). Investors who believed that the pendulum would move in one direction forever -- or, having reached an extreme, would stay there -- are inevitably disappointed.
On the third hand, however, because of the variability of the many factors that influence markets, no tool -- not even contrarianism -- can be relied on completely.
Contrarianism isn't an approach that will make you money all of the time. Much of the time there aren't great market excesses to bet against.
Joel Greenblatt: I've put it this way: just because no one else will jump in front of a Mack truck barreling down the highway, doesn't mean that you should!
Even when an excess does develop, it's important to remember that "overpriced" is incredibly different from "going down tomorrow."
Markets can be over- or underpriced and stay that way -- or become more so -- for years.
It can be extremely painful when the trend is going against you.
Seth Klarman: This is where it is particularly important to remember the teachings of Graham and Dodd. If you look to the markets for a report card, owning a stock that declines every day will make you feel like a failure. But if you remember that you own a fractional interest in a business and that every day you are able to buy in at a greater discount to underlying value, you might just be able to maintain a cheerful disposition. This is exactly how Warren Buffett describes bargain hunting amid the ravages of the 1973 to 1974 bear market.
It can appear at times that "everyone" has reached the conclusion that the herd is wrong. What I mean is that contrarianism itself can appear to have become too popular, and thus contrarianism can be mistaken for herd behavior.
Finally, it's not enough to bet against the crowd. Given the difficulties associated with contrarianism just mentioned, the potentially profitable recognition of divergences from consensus thinking must be based on reason and analysis. You must do things not just because they're the opposite of what the crowd is doing, but because you know why the crowd is wrong. Only then will you be able to hold firmly to your views and perhaps buy more as your positions take on the appearance of mistakes and as losses accrue rather than gains.