Truisms (what your mom never told you)
Stocks: CLL CWPC ECA NKO PDP SU TSK UTS
By Don Rodgersand of Price and Volume Analysis and Market Information
More often than not most are looking for the "easy ride". They are trying to find the site, the method, the post, the blog and so on, which will secure their future. The Holy Grail of Trading is the elusive but so close I can almost feel it method of trading the markets that will make you a god. I know this to be true because believe me, I spent days, months, and years trying to find it. What I did find is this. There is no quick and easy way to making a living from the markets. There is no quick and easy way to secure your future through your fortune. What there is however is a gradual learning process, supplemented by experience, and a realistic approach that will help you to understand that you will have a combination of winners and losers that should lead you to become comfortable trading and investing in almost any environment. The latest downturn we have been through is nothing compared to previous downturns with the most recent being the tech bubble meltdown in which we saw hundreds of dot com companies secure their IPO only to be cast upon the heaps of failed ideas with hundreds of millions of dollars attached to their downfall. We have seen a leveling of the run up and take your pick as to the reasons for the sell off. Is it Greenspans successor (old buddy whats his name)? or is it the easing of the hurricane threat coupled with the ongoing dialogue with the Iranian theocracy, or just a realisation that prices of crude may have just become a little out of hand and needed to be trimmed. Whatever the reason it has been a stomach churing turn of events for many who celebrated each new day like a kid on Christmas morning. I don't often agree with Jim Cramer but his recent comments regarding this market do have a ring of truth to them and one which I touched upon last week. Now, I don't know if he reads my blog or not but I think it only fair since I read his book after frequent visits to Indigo (it took about 27 visits to get through the entire book and after all the coffee at Starbucks it probably would have been cheaper to buy it) to mention his name. The run up and promises of quick doubles and triples (pick your energy stock) caused many to over-extend themselves financially and when the markets fell, caused a great deal of consternation when margin calls were made and forced selling accelerated the downturns. Now think for a moment. The big boys in the US for example know the level of margin that exists in their brokerage firms and how beneficial is it to not only charge the margin fees but to force the selling, grab all those commissions and drive prices down even further and create wonderful buying opportunties for them. That is my theory and me and Columbo, as Dennis Leary would say, are sticking to it. Below are a list of my truisms and feel free to add your own.
1). Protecting your capital is the number one rule of investing.
2). Averaging down or up on a losing position is like making love for chastity. It don't work.
3). An un-aimed arrow never misses-you have to have a target to be great.
4). The only sure way to win in the market all the time is to get tomorrow's closing prices today.
5). There are no guarantee's in the stock market-the only gurantee is there is no gurantee.
6). Pixel Picasso-the art of placing so many technical studies on a chart that two people get two different meanings.
7). Believe it or not, investing and trading should be profitable, but boring.
8). There are plenty of risk taking investors-there just aren't that many rich ones.
9). If someone gives you a hot tip no one else knows about, ask them why they don't like you.
10). Message boards can be great fun. However, rhetoric is the currency of fools.
11). It is easier to fall out of tree than to climb one. (I never liked Top Ten lists so mine is an 11 list)
Remember, the amateurs open the market, the pro's close it. Tomorrow is a new day.
By Don Rodgersand of Price and Volume Analysis and Market Information
More often than not most are looking for the "easy ride". They are trying to find the site, the method, the post, the blog and so on, which will secure their future. The Holy Grail of Trading is the elusive but so close I can almost feel it method of trading the markets that will make you a god. I know this to be true because believe me, I spent days, months, and years trying to find it. What I did find is this. There is no quick and easy way to making a living from the markets. There is no quick and easy way to secure your future through your fortune. What there is however is a gradual learning process, supplemented by experience, and a realistic approach that will help you to understand that you will have a combination of winners and losers that should lead you to become comfortable trading and investing in almost any environment. The latest downturn we have been through is nothing compared to previous downturns with the most recent being the tech bubble meltdown in which we saw hundreds of dot com companies secure their IPO only to be cast upon the heaps of failed ideas with hundreds of millions of dollars attached to their downfall. We have seen a leveling of the run up and take your pick as to the reasons for the sell off. Is it Greenspans successor (old buddy whats his name)? or is it the easing of the hurricane threat coupled with the ongoing dialogue with the Iranian theocracy, or just a realisation that prices of crude may have just become a little out of hand and needed to be trimmed. Whatever the reason it has been a stomach churing turn of events for many who celebrated each new day like a kid on Christmas morning. I don't often agree with Jim Cramer but his recent comments regarding this market do have a ring of truth to them and one which I touched upon last week. Now, I don't know if he reads my blog or not but I think it only fair since I read his book after frequent visits to Indigo (it took about 27 visits to get through the entire book and after all the coffee at Starbucks it probably would have been cheaper to buy it) to mention his name. The run up and promises of quick doubles and triples (pick your energy stock) caused many to over-extend themselves financially and when the markets fell, caused a great deal of consternation when margin calls were made and forced selling accelerated the downturns. Now think for a moment. The big boys in the US for example know the level of margin that exists in their brokerage firms and how beneficial is it to not only charge the margin fees but to force the selling, grab all those commissions and drive prices down even further and create wonderful buying opportunties for them. That is my theory and me and Columbo, as Dennis Leary would say, are sticking to it. Below are a list of my truisms and feel free to add your own.
1). Protecting your capital is the number one rule of investing.
2). Averaging down or up on a losing position is like making love for chastity. It don't work.
3). An un-aimed arrow never misses-you have to have a target to be great.
4). The only sure way to win in the market all the time is to get tomorrow's closing prices today.
5). There are no guarantee's in the stock market-the only gurantee is there is no gurantee.
6). Pixel Picasso-the art of placing so many technical studies on a chart that two people get two different meanings.
7). Believe it or not, investing and trading should be profitable, but boring.
8). There are plenty of risk taking investors-there just aren't that many rich ones.
9). If someone gives you a hot tip no one else knows about, ask them why they don't like you.
10). Message boards can be great fun. However, rhetoric is the currency of fools.
11). It is easier to fall out of tree than to climb one. (I never liked Top Ten lists so mine is an 11 list)
Remember, the amateurs open the market, the pro's close it. Tomorrow is a new day.
posted by douglas mcintyre at 6:06 AM
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