A perfection of means, and confusion of aims, seems to be our main problem – ALBERT EINSTEIN
In Part one we talked about how outlier events in the markets play such an important role in our final performance, yet how few are really aware of this fact. These events come out of nowhere, yet the experts [...]
A perfection of means, and confusion of aims, seems to be our main problem – ALBERT EINSTEIN
Malcolm Gladwell in his book Outliers says an “outlier is a scientific term to describe things or phenomena that lie outside the normal experience”. In Florida for example, you can expect most days during the summer to be somewhere [...]
The assumption that seeing is believing makes us susceptible to visual deceptions – KATHLEEN HALL JAMIESON
It is only human nature to make assumptions. In fact we don’t really give it much thought. We just assume our boss is impressed when we come in early or stay late. We assume our wife forgives us when we [...]
Ask not that the journey be easy, ask instead that it be worth it – Author unknown
I was having lunch with my partner and a client yesterday when the conversation turned to trading (imagine that), and in particular what keeps a trader from being consistently profitable. There are countless reasons why most people who attempt [...]
John Von Neumann, a Hungarian physicist introduced the world to “Game Theory” through a 1926 paper which proved “the only rational way to win at a childhood game called match penny, was to try not to win. In match penny, two players turn up a coin at the same moment. If both coins are heads [...]
“Everyone has a plan ‘till you get punched in the mouth’” – Mike Tyson
Mike Tyson knew how having your plan challenged can be rather upsetting, and could perhaps change your entire pre-conceived expectation. Surprises, whether expected or not, can drain the confidence right of out you, and cause you to make irrational decisions.
Most good traders [...]
Those that have knowledge don’t predict. Those that predict don’t have knowledge – LAO TZU
What criteria did you use to choose your latest investment? A better question would be, are you sure that you even understand the criteria?
For example, let’s say that you chose a mutual fund based on your advisors presentation of how well [...]
I would like to take this opportunity to thank our subscribers and to wish you all a wonderful and prosperous 2010.
Vince Lombardi once said, “It is a reality of life that men are competitive and the most competitive games draw the most competitive men. That’s why they are there – to compete. The object is [...]
Likeness to the truth is not the same thing as truth – SOCRATES
A set of statistics that suggest a positive expectation (a system) is quite helpful when sailing the seas of uncertainty. In fact I believe most traders need a definitive plan to assure discipline.
We need to look at the various measurements of risk and [...]
Nobody goes there anymore. It’s too crowded – YOGI BERRA
It continues to amaze me to watch the Wall Street Gurus apply scientific and fundamental logic to an illogical game. Not only does this cause traders, who buy into these scenarios, to underestimate risks, it also draws a crowd into the scenario, increasing risk further. [...]
