Posts filed under “Rules”
On Wednesday, I jotted down a few takeaways from the election that were applicable to investors and people running businesses. Really, it was for any one with an interest in learning from the misstep of others.
I liked the idea so much I decided to expand it for my Sunday Washington Post Business Section column. It was not about schadenfreude; rather, this is an inexpensive form of tuition, letting other organizations make strategic, cognitive and tactical errors that you can learn from. These include both of the candidates, the media, the consultants, the GOP primary candidates, some of the major memes of the campaign, a bit of philosophy, and a few words about money.
Called simply Lessons from 2012 Election, it discusses the various non-political lessons that can be derived from the entire season and applied to investors and business leaders.
Here are the 10 :
Lessons from 2012 Election
1. Process, not outcome, is what matters
2. Do your homework and practice
3. Think deeply before you speak
4. Avoid clichés
5. Don’t live in a bubble
6. Have influential allies
7. Be true to yourself
8. Choose your business partners well
9. It takes more than money
10. It helps to make your own luck
Note the focus is Non-Political lessons; I will let the politicos handle the specific getting elected related takeaways themselves. >
I still cannot access the print version, so if anyone can send me a PDF of G6, it would be appreciated. I’d like to see what the Post did with the dead tree version of it.>
Lessons from the 2012 election
Washington Post, November 11, 2012
I am always on the look out for lessons that I can apply to investing and business. This post-election morning is not any different. Let’s take a look at some of the more interesting aspects of the election season, and try to discern what lessons there are, for investors and others to learn: 1. Process…Read More
Economists have been stumped by the past dozen years.
The Dotcom collapse was an early warning that economists, as a class, were not clued in. Sure a handful recognized that there were budding problems — think Bob Shiller — but he was notable as an exception.
Then we had the entire debacles of 2000s – derivative implosion, housing collapse, credit crisis, market crash — and we found that the vast majority of economists are academic theorists who were completely blindsided by events in the real world. And those were the good ones, as opposed to the biased hacks whose goals have nothing to do with discerning objective reality.
We need to admit that Economists, as a profession, are stumbling around in the dark.
To quote Edward Hadas, “Policymakers and pundits still make confident pronouncements, but the conclusions are radically different. The expert disagreements give away the truth: ignorance reigns.”
Hadas identifies six questions which professionals should stop pretending they can answer:
1) What creates retail inflation?
2) How do financial asset prices affect the real economy?
3) Do big fiscal deficits damage the economy?
4) What does quantitative easing actually do?
5) How much leverage is too much?
6) How to deleverage without damaging the economy?
If economists cannot explain the basic workings of the economy, perhaps we should be relying on them much less for policy advice . . .
Admit economic ignorance
By Edward Hadas
Reuters, October 31, 2012
Yet another rule to add to our ongoing collection. This one comes from Economist David Rosenberg, formerly Merrill Lynch’s chief dismal scientist, now at Gluskin Sheff: 1. In order for an economic forecast to be relevant, it must be combined with a market call. 2. Never be a slave to the date – they are…Read More
Another set of instructive rules for investors, this one from Morgan Housel: 1. Nine out of 10 people in finance don’t have your best interest at heart. 2. Don’t try to predict the future. 3. Saving can be more important than investing. 4. Tune out the majority of news. 5. Emotional intelligence is more important…Read More
Nice set of rules from Wallace Witkowski of MarketWatch: 10 lessons from the market crash of 1987 1. Stay objective when others get emotional 2. Be like Buffett: Buy on the fear, sell on the greed 3. Make a crash shopping list 4. What goes up fast comes down faster 5. There’s no such thing as…Read More
After last week’s Rules frenzy, Cassandra Does Tokyo sent this in. Enjoy: ~~~ Trolling the blogosphere, it seems to be the season for sharing one’s so-called Golden Rules of Investing. So here goes… Cassandra’s 25-3/4 (or so) Tungsten-Filled Golden Rules #25-3/4. Do as I do – not as I say – but do it…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at Ritholtz’s rules of investing. The dead tree edition has the headline Think like a contrarian: Ritholtz’s rules of investing. We have 6 rules today, and 6 more rules next week: 1 Cut your losers short and let your winners run…Read More
Interesting set of rules from legendary investor John Templeton:
1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often
Complete explanation after the jump
Back in 2011, I pulled together a full run of Trading Rules & Aphorisms.
It turned out to be a worthwhile exercise, and so I began updating this semi annually. This is a list of my favorite traders, analysts, economists and investors views’ on what to do — and what not to do — when it comes to markets.
This is the latest updated version of my:
Trading & Investing Rules, Aphorisms & Books
• In Defense of the “Old Always” (Montier)
• The golden rules of investing (India)
If you have any suggestions for any good lists of rules I may have missed, please link to them in comments. If they are worthy, they will get added tot he list.
After this run, I plan on updating this list 2x per year . . .
My own trading rules and favorite Trading Books are after the jump