ZF Capital > Your guide to financial world

Thought of the Day (September 4, 2009)

On September 4, 2009, In Thought of the Day, by ElfLord

If you’re playing for the emotional satisfaction, you’re bound to lose, because what feels good is often the wrong thing to do. Richard Dennis used to say, somewhat facetiously, ‘If it feels good, don’t do it.’ In fact, one rule we taught the Turtles was: When all the criteria are in balance, do the thing you least want to do. You have to decide early on whether you’re playing for the fun or for the success. Whether you measure it in money or in some other way, to win at trading you have to be playing for the success.

– William Eckhardt, New Market Wizard

Tagged with: William Eckhardt

Thought of the Day (September 3, 2009)

On September 3, 2009, In Thought of the Day, by ElfLord

I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.

– Ed Seykota, Market Wizards by Jack Schwager

Tagged with: Ed Seykota

Thought of the Day (September 2, 2009)

On September 2, 2009, In Thought of the Day, by ElfLord

It is far better to sell early. If you are not early, you will be late; you’ll never sell at the exact top, so stop kicking yourself when a stock goes higher after you sell. The object is to make and take worthwhile gains and not get excited, optimistic, or greedy as a stock’s price advance gets stronger!

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

Tagged with: William O'Neil

Tradecraft – Size Matters

On September 2, 2009, In Good Articles, by ElfLord

TRADING IS NOT about taking risk, but avoiding it. To that end, I am always reluctant to commit too much capital to a single position. Not because I don’t believe in my flair for stock picking, but because sometimes the best way to manage risk is not to take it in the first place.

Forget Jack Welch and Michael Dell. When you buy a stock, it isn’t the company’s management you should be focused on, but that of your own portfolio. And while security selection gets all the headlines, it’s money management — namely position size — that ultimately has the biggest impact on your bottom line.

You want to buy the dips? Or stocks making new 52-week lows? Go ahead, knock yourself out. But please do yourself a favor and keep the stakes small. Most people won’t hesitate to drop 15% or more of their portfolio into a single name at a single price. That isn’t just dangerous, it’s insane. A good portfolio should be structured like a good life. Everything in moderation. (more…)

Tagged with: diversify • money management

Thought of the Day (September 1, 2009)

On September 1, 2009, In Thought of the Day, by ElfLord

Don’t trade the market, trade what you know. In other words, don’t trade every pattern in the market, trade the ones that you know and trust.

– Bill McLaren

Tagged with: Bill McLaren

Thought of the Day (August 31, 2009)

On August 31, 2009, In Thought of the Day, by ElfLord

The bigger the base, the bigger the move. And the bigger the top, the bigger the drop.

– Stan Weinstein

Tagged with: Stan Weinstein

Tradecraft – What’s Wrong With Long-Term Investing?

On August 31, 2009, In Good Articles, by ElfLord

THE POPULAR MISCONCEPTION is that traders are foolish short-term gamblers while investors are the prudent, steady hands in it for the long term. But whether you call it trading or investing, the golden rule remains the same: Don’t lose money. While investment goals and styles are different, we are all gunning for the same result. Not great companies or funds with five stars, but consistent returns that outpace inflation.

As a trader, my goal isn’t to make trades all day long, but to secure a rate of return that protects my investors’ principal and makes them money…period. Saying it’s a tough market is just an excuse, and unlike investors who are “in it for the long haul,” I don’t see any compelling evidence that owning stocks for long periods of time is the best way to achieve that return. (more…)

Tagged with: fallacy of ltbh

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ZF Capital

Thought of the Day (September 4, 2009)

Thought of the Day (September 3, 2009)

Thought of the Day (September 2, 2009)

Tradecraft – Size Matters

Thought of the Day (September 1, 2009)

Thought of the Day (August 31, 2009)

Tradecraft – What’s Wrong With Long-Term Investing?

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