Posts filed under “Rules”

Jeremy Grantham: Mistakes Made Over 47 Years

Jeremy Grantham’s quarterly GMO letter is out. It is a long rambling look at everything from Tesla to Fracking to Fertilizers to Food.

But the narrative culminates with how as a young lad, Grantham made a trade based on a neighbor — legal inside information. He explains how that worked out, via his 8 lessons learned during his tenure on Wall Street.

 

Investment Lessons Learned: Mistakes Made Over 47 Years

1) Inside advice, legal in those days, from friends in the company is a particularly dangerous basis for decisions; you know little how limited their knowledge really is and you are overexposed to sustained enthusiasm.

2) Always diversify, particularly for your pension fund.

3) Fraud, near-fraud, or colossal incompetence can always strike.

4) Don’t buy stocks yourself if you’re an amateur: invest with a relatively rare expert or in a low-cost index.

5) Investing when young will start your brain turning on things financial.

6) Painful errors teach you more than success does.

7) Luck helps and finally…

8) Have a convenient mother to be the fall guy.

Good stuff!

 

 
Source:
Year-End Odds and Ends
JEREMY GRANTHAM
GMO FEBRUARY, 2014
http://www.gmo.com/websitecontent/GMO_QtlyLetter_ALL_4Q2013.pdf

Category: Investing, Psychology, Rules

Huprich: Wisdom Comes in the Smallest of Packages.

We previously published Art Hurpichs’ Market Truisms and Axioms back in 2011.  Art is a CMT with Day Hagan Asset Management, and he returns with an updated set of Stock Market Rules to Remember. Enjoy. ~~~ As you are reading this, we are in the process of moving our “youngest” to Virginia, as he prepares for…Read More

Category: Rules, Technical Analysis, Trading

Kass: 10 Laws of Stock Market Bubbles

I like this list from Dougie: Debt is cheap. Debt is plentiful. There is the egregious use of debt. A new marginal (and sizeable) buyer of an asset class appears. After a sustained advance in an asset class’s price, the prior four factors lead to new-era thinking that cycles have been eradicated/eliminated and that a…Read More

Category: Markets, Psychology, Rules

More Signal, Less Noise

Its Friday, the day I like to step back and get all Zen on y’all. As promised yesterday, our subject this morning — indeed, over the past few months — is how to reduce the meaningless distractions in your portfolio (and your life). You want less of the annoying nonsense that interferes with your investing,…Read More

Category: Cognitive Foibles, Financial Press, Investing, Psychology, Rules

90% of Everything is Crap

Source: Mental Floss     As someone who has spent his fair share of time debunking nonsense, I love the elegant way Theodore Sturgeon trashed this anti-SciFi trope in the March 1958 issue of Venture: “I repeat Sturgeon’s Revelation, which was wrung out of me after twenty years of wearying defense of science fiction against…Read More

Category: Philosophy, Quantitative, Rules

Byron Wien’s 20 Rules of Investing & Life

Outstanding list from a man who has accumulated much wisdom over the years:   Lessons Learned in His First 80 Years 1. Concentrate on finding a big idea that will make an impact on the people you want to influence. The Ten Surprises, which I started doing in 1986, has been a defining product. People…Read More

Category: Investing, Rules

Are You Trying to Get Rich — Or Stay Rich?

Last week, Bloomberg caused a minor stir with their story on C/NET founder Halsey Minor (How Halsey Minor Blew Tech Fortune on Way to Bankruptcy): “How do you sell the technology company you founded for $1.8 billion and five years later file for personal bankruptcy? For Halsey Minor, it may have been a fascination with…Read More

Category: Rules, Wages & Income, Wealth Management

Random Thoughts: Comebacks, Intraday Reversals and the like

Since it is a Friday before a 3 day holiday weekend, it is a good time to kick back and think about what the recent market action might (or might not) mean. • Most Day-to-day market action is noise, There is very little signal involved, with the vast majority of commentary simply after-the-fact rationalizations of…Read More

Category: Investing, Markets, Psychology, Rules, Sentiment, Technical Analysis

Bernard Baruch: 10 Rules of Investing

“Being so skeptical about the usefulness of advice, I have been reluctant to lay down any ‘rules’ or guidelines on how to invest or speculate wisely. Still, there are a number of things I have learned from my own experience which might be worth listing for those who are able to muster the necessary self-discipline:…Read More

Category: Investing, Rules

Warren Buffett Investing Quotes

Given that its the Berkshire annual meeting this weekend, now is as good a time to roll out these quotes from Warren himself:   “To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of…Read More

Category: Investing, Rules