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  • Study the Greats

    Study those who are a great success in your chosen field. Find out what makes them tick. Not so that you can copy their methods verbatim. (Any trader who has bought an ‘off the shelf’ trading system knows how hard it is to follow a system they haven’t had input into themselves). Study the successful… Read more…

  • Why Trying to Be Perfect Won’t Help You Achieve Your Goals

    Perfectionism within trading is a major impediment to a lot of new traders. The thought of having a string of losing trades (the norm) is simply an anathema to them and is completely intolerable. The unfortunate part about trading is that it is a profession of being wrong and that sets it apart from most… Read more…

  • Things That Make You Think

    I tend to be fascinated by data – I am also a student of history and when those two things combine I can amuse myself for hours. The chart below is from The Economist and it looks at a series of social and economic measures that came about as a result of the First World War.… Read more…

  • Ratio Of Buy To Sell Recommendations

    I am just putting the final touches to a presentation I am giving at the AIA Conference on the Gold Coast next week and I have been looking in part at the inherent bias within recommendations by analysts. Fortunately, this topic is well covered in the literature and I have been able to pull together… Read more…

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Study the Greats

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Study those who are a great success in your chosen field. Find out what makes them tick. Not so that you can copy their methods verbatim. (Any trader who has bought an ‘off the shelf’ trading system knows how hard it is to follow a system they haven’t had input into themselves).

Study the successful people in your field so your own views on the markets will be verified and validated.

When did you last read one of the books in the “Market Wizards” series? Chris Tate reads and re-reads them consistently. I can tell you why he does. Not so that he can learn the secrets of how those great traders trade. He reads so that he can test his own philosophies against those great in the trading field.

It’s gratifying and satisfying to know that you, and the one you have chosen to emulate, agree upon so much.

Why Trying to Be Perfect Won’t Help You Achieve Your Goals

Perfectionism within trading is a major impediment to a lot of new traders. The thought of having a string of losing trades (the norm) is simply an anathema to them and is completely intolerable. The unfortunate part about trading is that it is a profession of being wrong and that sets it apart from most other professions which rely upon being right for career advancement and the attainment of success.

In the book Art & Fear, authors David Bayles and Ted Orland share a surprising story about a ceramics teacher. This story just might reframe the way you think about setting goals, making progress, and becoming better at the things that are important to you.

Here’s what happened…

The ceramics teacher announced that he was dividing the class into two groups. All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality.

His procedure was simple: on the final day of class he would bring in his bathroom scales and weigh the work of the “quantity” group: fifty pounds of pots rated an “A”, forty pounds a “B”, and so on. Those being graded on “quality”, however, needed to produce only one pot — albeit a perfect one — to get an “A”.

Well, grading time came and a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity!

It seems that while the “quantity” group was busily churning out piles of work — and learning from their mistakes — the “quality” group had sat around theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.

More here – James Clear

Things That Make You Think

I tend to be fascinated by data – I am also a student of history and when those two things combine I can amuse myself for hours. The chart below is from The Economist and it looks at a series of social and economic measures that came about as a result of the First World War. Much of this chart is as you would expect, Europe emerged rooted and the US began a cycle of economic growth. What did surprise me was that Britain was able to maintain a stable population.

Screen Shot 2014-07-29 at 8.54.38 am

 

This ability of the UK to have a stable population is immensely interesting given the slaughter visited upon their young men by their staggeringly incompetent leaders. So I had a look as to why this might be and it turns out that commentators give a variety of reasons as to why this might be. However, as with all things there is argument as to whether the improvement was a result of economic changes such as improved wages and a stable minimum wage or changes in social policy such as better education for mothers. I would also postulate that the change in infant mortality might have also be an indirect response to most doctors being away at the front line. Therefore maternal care was thrust back onto midwives and therefore was back in the hands of the experts.

Ratio Of Buy To Sell Recommendations

I am just putting the final touches to a presentation I am giving at the AIA Conference on the Gold Coast next week and I have been looking in part at the inherent bias within recommendations by analysts. Fortunately, this topic is well covered in the literature and I have been able to pull together some bits and pieces into a dodgy table.

The data below shows the ratio of buy to sell recommendations over time. Interestingly the first bit of data I as able to find dated back to 1983 and it showed the ratio at just below parity. Coincidentally this low ratio of advisor buy recommendations was perfectly timed with the beginning of the 1980′s bull market. Who said analysts were not useful – well at least as a contrarian indicator. I have been able to find some unsupported data that this ratio has now blown out to 100 to 1 in recent years.

Screen Shot 2014-07-29 at 8.00.24 am

Markets Don’t Dwell on Bad News

Following on from my post on the Dow following the events of last week comes this analysis by the WSJ on how investors react to bad news.

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I agree with the general sentiment however I think the 13.5% experienced during the Israeli invasion of Gaza owes more to the market being in the last throes of the GFC than to a single political event.

How To Speak Like A Land Rat

Sometimes its good to look at the participants in other asset classes just to get an idea that it is not only people involved in finance who are useless. I have to admit I find real estate fascinating in the ability of agents to be successful despite their absolute and total incompetence. For example I am currently on a land rats alert service for properties. I have strict criteria as to what I am interested in and yet not one of the alerts I have received match what I am looking for. Its somewhat akin to ringing your broker asking to buy BHP and being given CBA and then receiving a blank look when you tell them they are peanuts.

In the midst of the latest national property boom, our thoughts naturally turn to the happy figure of the estate agent. You might idly wonder if it isn’t too late to switch careers in order to stand in the same blizzard of made-up money long enough that quite a lot of it sticks to you. But in order to succeed, you will have to master the jargon. Estate agents communicate in a dialect renowned for its strangulated syntax, peculiar vocabulary and breathtaking insouciance, dancing on a rhetorical knife-edge between salesmanship and fraudulence. Here are some tips to get you started. All examples are drawn from actual recent estate-agent “literature”.

More here – The Guardian

PS: All you need to know about real estate agents can be seen in the fact that they hired Jordan Belfort to speak at the Australian Real Estate Conference. Not even stockbrokers would be that dim…..

Motivation Monday

 

 
 

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