Posts filed under “Psychology”

The Apprentice Investor

Tscm_1I have a new column starting on TheStreet.com. Its called "The Apprentice Investor." Its a weekly discussion which will appear each Monday.

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For the novice investor, there are plenty of sites that will help them "dip their toes in the water." For the pros, more data and commentary is available than could be read in lifetime. A great void, however, stretches between the two. Its like a barbell. There is no "Sophmore" commentary between the newbie and the more sophisticated investor.

Ironically, that transition period is where investors do themselves the most damage. Just as they feel they have learned a thing or two — more confidence begets larger and more aggressive trades — they get mangled.

I’ve seen it far too many times to count.

What I have in mind is to help transition a reader from frosh to grad student; An accelerated course of the school of hard knocks — minus much of the costly pain.

There are many goals I hope to accomplish with the Apprenticed Investor, but let’s focus on three:

First, I hope to share with you the lessons, experiences and skills I have learned over the years. Not give you a fish, but teach you to fish. Hopefully, you won’t have to pay the expensive tuition these lessons originally cost me (i.e., $$$ & losses).

Second, I hope to make clear the challenges of trading/investing. Sure, you know investing is tough — but why is it so? What’s the reason that trading is so damn hard? Why do so many people — including the pros — fail to outperform? Learn the reasons for this, and you will have a much better understanding of the field of battle . . . and have a chance at superior performance, maybe even outperformance (I’ll explain the difference later).

Last, I want to provoke you into thinking. Complacency is the enemy of the investor. Get too comfortable and the markets will toast you. An enigmatic Greek philosopher named Heraclitus observed that "nothing endures but change." That’s as true today as it was 2,500 years ago in Heraclitus’ time. Failing to adapt to an ever shifting landscape is a sure path to ruin.

The first column goes up today, and its called "Expect to Be Wrong."

Please check it out, and be sure to tell me what you think.

Category: Investing, Markets, Media, Psychology

The Stupid Phase of Oil

Category: Commodities, Psychology

(Why) You Suck at Investing

USA Today had an interesting article this past week (it happens). The discussion was on the fact that Most Americans no good at investing. A more accurate title would have been "Humans not good at investing." There’s a very specific reason for this; It is something I am in the middle of writing up, and…Read More

Category: Apprenticed Investor, Investing, Psychology, Rules

Dot-Coms vs. Real Estate

Category: Finance, Markets, Psychology

Odds & Ends

Category: Film, Music, Psychology

HedgedFund.org’s Internet Links of Interest:

Category: Finance, Investing, Markets, Psychology, Weblogs

The Psychology/Sentiment of Oil

Category: Commodities, Markets, Psychology

The kinda-eventually-sorta-mostly-almost Efficient Market Theory

“I guess we’re all behaviorists now” -Richard Thaler   One of the most widely believed theories on Wall Street is the Efficient Market Hypothesis (EMH). Adherents of this charmingly naive thesis believe that markets are an incredibly effective distributor of information. Because of this, say EMH theorists, it is impossible, therefore, to beat the market,…Read More

Category: Philosophy, Psychology, Really, really bad calls

3 Bubbles

I’ve been meaning to follow up on a terrific article from the WSJ last week, titled Why Analysts Aren’t Sure The Bubble Has Fully Burst. The “Three Bubbles” graphic accompanying the article is simply a gorgeous instrument of communication (its here Three Bubbles PDF). E.S. Browning does an admirable job soliciting a variety of viewpoints…Read More

Category: Finance, Psychology

The Skeptic’s Guide to Stock Tips

Category: Apprenticed Investor, Investing, Markets, Psychology, Rules, Trading