Posts filed under “Trading”

World’s Greatest Stock Picker®

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My Sunday Washington Post Business Section column is out. This morning, we look at The world’s greatest stock picker? Bet you sold Apple and Google a long time ago. (Thats the print headline; online it was Why the world’s greatest stock picker would’ve ditched Apple).

This is the third (and likely final) installment of our World’s Greatest ®” series. In our first episode, we looked at how well the world’s greatest trader did against an ordinary indexer. As it turned out, they finished more or less about the same. Blame short-term capital gains taxes, which took a huge bite out of the WGT’s performance. In the next chapter, we considered how well the world’s greatest market timer did against a dollar-cost-averager. You might think that only buying at bottoms would generate great returns. They were not bad, but as it turns out, they are so rare, that method creates lots of missed opportunities.

Today, we look a slightly different tack for this installment of our “World’s Greatest ®” series. In those prior two “World’s Greatest” comparisons, what evened out the final performance results in each case were taxes and costs. While those things matter in the current case, our focus instead will be on something else. As it turns out, the key determiner of your success is your own psychology – and how your emotions work against your rational judgment.

Here’s an excerpt from the column:

“Let’s imagine for the moment that you are the World’s Greatest Stock Picker. You have an uncanny talent for ferreting out “the next Microsoft” — companies that are on the sharpest edge of what’s next, that are about to undergo tremendous growth. These firms will rule the world: They will be the most powerful, profitable and influential corporate entities known to man.

Even better, your superpower is that you can find these companies when they are tiny, before they have had their explosive growth, when hardly anyone has heard of them. You find and buy these stocks while their prices are still in the single digits. Companies like Apple, Google, Tesla, Netflix and Chipotle that will one day measure their growth in increments of thousands of a percent.

Can you imagine how much wealth you could create?

I have some bad news for you.”

I really like the way this one came out . . .
 

Source:
The world’s greatest stock picker? Bet you sold Apple and Google a long time ago.
Barry Ritholtz
Washington Post, October 5 2015   
http://www.washingtonpost.com/business/even-if-you-could-pick-huge-winners-could-you-hold-them/2014/10/03/bd426e34-49ba-11e4-891d-713f052086a0_story.html

Category: Apprenticed Investor, Investing, Trading

MiB: Jack Schwager

This week’s Masters in Business Radio show at 10:00 am and 6:00 pm on Bloomberg Radio 1130AM and Siriux XM 119 (it also repeats all weekend).

Our guest this week is Jack Schwager, best known as the author of the seminal and popular Market Wizards books, first published in 1988.

You can listen to live here or stream it at Soundcloud or download the 55 minute podcast here. (See below for the podcast after the live show)

All of the past Podcasts are here (and coming soon to Apple iTunes).

Next week, we speak with Larry Swedroe, Buckingham Asset Management’s Director of Research.

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Books by Jack Schwager:

Market Wizards books
Market Wizards: Interviews With Top Traders
The New Market Wizards
Hedge Fund Market Wizards
The Little Book of Market Wizards

Other books
• Market Sense and Nonsense: How the Markets Really Work
Getting Started in Technical Analysis
A Complete Guide to the Futures Markets: Fundamental Analysis, Technical Analysis, Trading, Spreads, and Options

 

Streaming audio after the jump

 
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Category: Podcast, Trading

Too Bullish or Too Bearish?

One of my favorite pastimes is dissecting accepted Wall Street wisdom to see if it contains any value for investors or traders. Often, upon examination, the widely held beliefs turn out to be closer to magical thinking than financial acumen. One of the more recent examples is the way some analysts use data on sentiment…Read More

Category: Markets, Sentiment, Trading

Get Ready for the Shanghai Composite Break Out

  China is on the verge of breaking out from its pattern of consolidation, at least according to the monthly chart book from the analytics team at Bank of America Merrill Lynch. If you look at the chart above you can see that the Shanghai Composite Index is in the midst of transitioning into an…Read More

Category: Markets, Technical Analysis, Trading

Best & Worst Trades of All TIme

Nice graphic showing the 10 greatest — and worst — trades of all time. The lure of these outsized billion dollar wins seems to affect the psychology of many investors and traders, looking for that one giant score.

 

click for full infographic
Jesse Livermore
Source: 888 Markets

 
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Category: Digital Media, Trading

Why Long-Term Investors Beat Short-Term Traders

No matter what, the long-term investor comes out ahead of the short-term trader Barry Ritholtz Washington Post, August 10, 2014   Last time, we looked at why traders are at an almost insurmountable disadvantage against investors due to short-term capital gains taxes. Many of you wrote in to note several factors that would have allowed…Read More

Category: Apprenticed Investor, Investing, Trading

HFT: Jumping the Queue

click for full image Source: WSJ

Category: Digital Media, Regulation, Trading

Another look: A short-term trader won’t beat long-term investor

  My Sunday Washington Post Business Section column is out. This morning, we revisit the advantages the long term passive indexer has versus short term active traders. The print version had the full headline The trader can narrow the gap but won’t win, while online, it was called No matter what, the long-term investor comes out ahead…Read More

Category: Apprenticed Investor, Investing, Trading

Last month, I spilled a considerable number of pixels explaining why Rupert Murdoch’s Time Warner bid had no significance to whether or not this is a market top. My short list included complaints of cherry picked data that somehow ignored most of Murdoch’s M&A activity over the past half century; a laughably small sample size…Read More

Category: Cognitive Foibles, Investing, Markets, Psychology, Really, really bad calls, Trading

Have We Reached the End of the Bull Market?


Source: Bloomberg, Aug. 1 2014

Strategas Research Partners Managing Director Christopher Verrone and Former Council of Economic Advisers Chairman Alan Krueger discuss the markets on “Bloomberg Surveillance.”

Category: Trading, Video