30-years ago it was considered irresponsible to use a market timing strategy to try and outperform the S&P 500. In recent years as investors have started to gain increased levels of access to historical data and the tools to develop effective trading models, it might now be considered irresponsible to not use a market timing strategy.
At least that’s what famed investor and gambler Blair Hull believes, and his recent study on building a market timing strategy that predicts future returns, proves exactly that. Read more »
Blair Hull is a legend of Wall Street and a former professional blackjack player. He was named by Worth magazine as one of Wall Street’s 25 smartest players and by Forbes magazine as one of the most successful traders of the last 40 years.
Today, Hull operates a number of ventures including an ETF that attempts to time the S&P 500 through a mix of 12 technical and fundamental indicators. In this article, we will look at the idea behind Blair Hull’s strategy and the 12 indicators he uses. Read more »
I recently finished reading the book A Man For All Markets by Ed Thorp. I have to say that I think this could be one of the best trading books ever written!
Why? Simply because Ed Thorp is a true trading legend and in this book he details how he went about beating not just the financial markets, but casinos as well. Read more »
In this article I take a look at some timeless investing advice from Peter Lynch. Lynch is an American investor who ran the Magellan Fund at Fidelity Investments between 1977 and 1990. He’s one of the most successful fund managers of all time averaging an annual return for Magellan of 29.2%. Read more »
Technical analysis refers to the study of past price action to predict future market moves. It makes use of charts, trading volume, and other statistical or mathematical indicators to gauge how the market might behave, based on the concept that the fundamentals of an asset are reflected in its historical price action. Read more »
In this post I take a look at one of the greatest traders of all time, Jesse Livermore. Jesse was famously profiled in the classic investing tome Reminiscences of a Stock Operator, a book that has been called the best trading book every written.
This is a long piece, clocking in at around 9,000 words and it covers all of Jesse’s most important trading lessons. The quotes are taken directly from the original book by Edwin Lefèvre. Read more »
In the classic trading book, Reminiscences of a Stock Operator, Jesse Livermore spoke a little bit about a professional gambler called Pat Hearne. Pat would treat the markets like a casino game (such as roulette, faro or blackjack) and his strategy was to make a series of calculated bets, always looking for small, sure wins. Read more »
Warren Buffett is one of the richest men in the world and it is not hard to argue him being the greatest investor the world has ever seen.
Sure, there are money managers who have produced greater yearly returns over the course of 10 or 20 years but none have been able to compound wealth so well for the length of time Buffett has.
Read more »
Jesse Livermore, aka the Boy Plunger, aka the Great Bear of Wall Street, is one of the great American stock traders. He made (and lost) several million dollar fortunes buying and short selling stocks in the early 20th century and traded through the great Wall Street crashes of 1907 and 1929.
His book ‘Reminiscences of a Stock Operator‘ is one of the all time best trading books and contains many of Jesse’s best trading rules.
Jesse Livermore Trading Rules & Quotes
1. Always sell what shows you a loss and keep what shows you a profit.
Buy as a print!
2. Money cannot consistently be made trading every day or every week during the year.
3. A man must believe in himself and his judgement if he expects to make a living in this game. That is why I don’t believe in tips.
4. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion.
5. Prices are never too high to begin buying or too low to begin selling.
Available as print. Click to buy
6. Remember, don’t fight the tape!
7. Never buy a stock because it has had a big decline from its previous high.
8. Nobody can catch all the fluctuations.
Available as print.
9. The human side of every person is the greatest enemy of the average investor or speculator.
10. It is not good to be too curious about all the reasons behind the price movements.
11. If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.
12. Never sell a stock because it seems high-priced.
Buy as a print!
13. Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.
14. No diagnosis, no prognosis. No prognosis, no profit.
Available as print.
15. Wishful thinking must be banished.
16. Fear keeps you from making as much money as you ought to.
17. One should never permit speculative ventures to run into investments.
18. Never average losses.
19. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.
20. I was bearish in a bear market. That was wise. I had sold stocks short. That was proper. I had sold them too soon. That was costly.
Available as print.
21. As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.
22. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play…
23. Nothing new ever occurs in the business of speculating or investing in securities and commodities.
24. Markets are never wrong. Opinions often are.
Buy as a print!
I hope you enjoyed some of these quotes. If you haven’t read Reminiscences of a Stock Operator make sure to pick it up because it’s a great entertaining read too.
By the way, these prints are available to buy! Just click on the one you are interested in. They would look good in any trading office 😉
What’s your favourite Jesse Livermore trading rule?
If you want to be successful at investing or trading you need to find your own way. I don’t see much point subscribing to any of these stock picking services or ‘Guru’ picks.
(Unless of course they are used to educate yourself as to how to find good trades.)
That being said, one of my favourite investors is Jim Rogers and it’s always good to hear him talk.
If you don’t know Jim I wrote a bit of a profile on him a while back. Suffice to say, Jim is a legend on Wall Street and not just for setting up the Quantum Fund with George Soros.
Video from London Real
The video below comes from one of my favourite online podcasts, London Real, and is about an hour long if you fast forward through some of the advertising at the beginning.
Jim is always happy to talk about where he is invested and it’s good to hear his thoughts on markets.
As a longer term investor, Jim’s views on markets change very slowly. He has been bullish on commodities (particularly agriculture) for years now and he is likely to be bullish for a long time yet.
He sees markets moving in cycles and believes that most cycles take 20, 30 years to play out.
He’s bullish on Asia, particularly China but also recommends Singapore and Japan in the video. He also recommends North Korea and would put all of his money into the country if he was allowed (which he isn’t).
How to play China like Jim Rogers
Jim has been bullish on China for more than 30 years and continues to be positive on the country. He picks his moments though, and after some time on the sidelines, he’s recently started to buy up a few more Chinese stocks.
Jim says that the way he is playing China is to follow the government. The Chinese government are spending lots of money this year ($2.45 trillion to be precise) and the best way to profit is to follow where the money’s going.
According to Rogers, anyone can see where the money’s going so it’s just a case of finding strong companies that may benefit and putting some money in. Railroads, water, defence and tourism. These are all areas that will see big government spending over the next couple of years as China seeks to improve infrastructure, tackle the nation’s water problem and beef up it’s national security.
So with that information in mind, how can investors benefit? What about these ideas?
Anhui Conch Cement Co. and Sany Heavy Industry Co. are two construction-related companies that could benefit from increased government spending on infrastructure.
China Easter Airlines Corp. is China’s second-largest airline carrier set to benefit from the boom in Chinese tourism.
Jiangxi Copper Co. could do well as China rolls out national power grids mostly made from copper.
China Green Agriculture Inc. might prosper with the country’s increasing food demands.
China Water Industry Group Ltd. may be the answer to the nation’s dramatic water problems.
Can you think of any Chinese stocks that could benefit from more government spending? Please comment below.