ZF Capital > 2009 November

Thought of the Day (November 20, 2009)

On November 20, 2009, In Thought of the Day, by ElfLord

The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you you hope that every day will be the last day—and you lose more than you should had you not listened to hope—to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out—too soon.

Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does.

– Jesse Livermore, Reminiscences of a Stock Operator

Tradecraft – It’s a Big World After All

On November 20, 2009, In Good Articles, by ElfLord

THERE’S A CERTAIN swagger that goes along with being an American. We’ve won the cold war, the Gulf war and so far the war on terrorism. Our currency is the international standard by which all others are judged and our companies are the most highly valued and actively traded in the world.

But along with the swagger comes myopia. Like many Americans, I too often fall prey to the fallacy that that world news is American news, world culture is American culture and the world market is the American market.

This Western-centric bias is echoed among the various economists, analysts and taking heads who are paid to pontificate on the state of the world economy. There’s a general consensus that whenever the world’s economy does turn around, the United States will once again be leading the charge higher.

These days being patriotic isn’t just popular, but hip. But as we always like to point out, the purpose of investing is to make money, not make a political statement. And for a number of factors, when it comes to putting new money to work these days, my sights are increasingly set outside U.S. borders. (more…)

Thought of the Day (November 19, 2009)

On November 19, 2009, In Thought of the Day, by ElfLord

On Wall Street, wise men, as well as fools, can be easily drawn into booby traps. In fact, in my experience a person’s years and quality of education have very little to do with making big money investing in the market.

The more intelligent people are, the more they tend to think they know what they are doing– and the more they will have to learn the hard way how little they really know about outsmarting the stock market. The few people l have known over the years who have been unquestionably successful making money in stocks were decisive, decision-making individuals without huge egos.

The market has a simple way of whittling all excessive pride and overblown egos down to size. After all, the whole idea is to be completely objective and recognize what the marketplace is telling you, rather than try to prove that the thing you said or did yesterday or six weeks ago was right. The fastest way to take a bath in the stock market or go broke is to try to prove that you are right and the market is wrong.

– William O’Neil, How to Make Money in Stocks

Thought of the Day (November 18, 2009)

On November 18, 2009, In Thought of the Day, by ElfLord

The ultimate goal of a more effective and efficient life is to provide you with enough time to enjoy some of it.

– Michael Leboeuf

Tradecraft – Less Is More

On November 18, 2009, In Good Articles, by ElfLord

ALTHOUGH MCDONALD’S (MCD) has since tried everything from cafes to chicken joints, the company’s foundations (and real growth) came from Ray Kroc’s original, stunningly simple concept: a burger joint that was cheap, efficient, consistent and, most of all, fast.

And while the company already had a solid footing, Apple Computer’s (AAPL) real growth came in 1984 with the introduction of the Macintosh. Even though the machine was more expensive and less powerful than its PC rivals, the computer “for the rest of us” succeeded because of one solid premise: You could actually understand how to use it.

Today, Ford Motor (F) is a large car conglomerate of brands encompassing everything from Mazda to Mercury, Lincoln to Land Rover. But Ford became the largest car maker thanks to the Model T, a mass-produced, reliable, cheap auto with no bells, whistles or variations whatsoever. As Henry Ford supposedly said, you could have it any color so long as it’s black.

The point is that each of these magnificent enterprises succeeded by focusing on a relatively narrow goal. Get that right, and everything else usually just falls into place. (more…)

ZF Capital

Thought of the Day (November 20, 2009)

Tradecraft – It’s a Big World After All

Thought of the Day (November 19, 2009)

Thought of the Day (November 18, 2009)

Tradecraft – Less Is More

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