A10, Stock Trader Dude

Only a finite number of mistakes you can make:1.   We can sell too early2.   We can buy too late3.   We can hold too long4.   We can buy too soonResearch is not enough. We are human beings first and investors second. It goes against human nature to find some titillating information and do nothing. There’s room for all of us as long as we forge a strategy that’s consistent with whom we are. Acknowledge our limitations and make the most of what comes naturally.Bargain hunter – value investorThe Visionary – growth stocksContrarian – turnaroundsSentimentalist – enduring franchisesSkeptic – short-salesThe Trader (keep any short-term trades/short-term opportunities separate from long-term investments)The Adventurist – speculationsThe author stated that you can get surprisingly far simply by mastering the basics. What that says, in a roundabout way, is that you don’t need to know a whole lot about investments because your method of operation will determine the results, or heavily weight the results. His trading/investment record is missing, so I don’t think the author mastered the basics… like a lot of people that love to talk about stocks and investments but they can’t get their investments to provide for them. I’ll narrow down the field to what the author missed, your results are almost exclusively determined by how long you hold the stock, so that, if your objective is to buy and then sell at a higher price in the market, when you sell is of far greater importance than when you buy.

How to conquer your worst impulses and save your financial future? You probably won’t find any life-changing answers in a book that promises something substantial. But at least you don’t have to waste time reading the book. Here we go:Envy: To judge your success by the investments of others and try to keep pace, then resent when your investment falters.Vanity/Pride: You refuse to accept help because you know best.Lust: Overpowering attraction to some investments despite the facts.Avarice/Greed: Holding too long, convinced the investment will go up.Anger/Wrath: Sacrificing long-term growth for a quick hit.Gluttony: Filling up on stock with little regard for overall financial health.Sloth: Ignoring your financial future by putting off saving.It’s not particularly interesting. There is one example about a young lady in either the greed or gluttony section that keeps buying the same stock as it goes up. The stock continues to perform well over the years and she buys more, but the author warns that she shouldn’t and then mentions that even though the stock is still up as of the writing of the book he’s convinced the young lady is making a mistake. I think the author is making a mistake – buying the stock as it continually moves up means that it is showing a profit in the lady’s account, and while no one would say with a guarantee that holding it forever would be prudent – the important thing is that she’s profiting (all she has to do is protect her profit), so why should she waste time with buying stocks that are doing anything but going up?