Australian (ASX) Stock Market Forum

Do you have an investment mantra?

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Thanks everyone for your comments.

Some great nuggets of wisdom there.

:xyxthumbs

I just finished reading The Big Short by Michael Lewis. It was really interesting how the people betting against the sub-prime market felt like they might be the ones who were insane. They each had their own ways of sticking to their convictions, or letting them go.
 
From The Wedding Singer:

Gee, you know that information... really would've been more useful to me "yesterday."
 
" Diversification is a protection against ignorance.
It makes very little sense to those that know what they are doing" - Warren Buffett

" A winning strategy must include losing."- Rich Dad.
 
In a Bull market, never sell a dull market, in Bear market, never buy a dull market
There are old traders and bold traders but no old bold traders ~ not sure.

An error does not become a mistake,
Unless you refuse to correct it.
~Clive Palmer (quoting someone else)

In a Bull market, never sell a dull market, in Bear market, never buy a dull market

Buy the rumor, sell the news/announcement (especially if it reacts strongly)

Don't fret a missed opportunity. There is another one just around the corner.

The market tends to remain irrational longer than you can remain solvent!

Most traders consider themselves better than the herd. They are the herd ~ Notting


If you want to make money from losers, write a book with Secrets in the title. ~ Notting

If a taxi driver gives you a tip, short it! ~ Notting

When they reverse hard against a trend on an announcement be a short term maverick ~ Notting
(AWC classic example today!)

Play the trueisms in reverse. ~ Notting

Rejoice when you follow your rules, even if it's a losing trade. ~ Notting
 
Julia said:
Disagree entirely with this.
Chop your losses out quickly.
Let only the winners run.
Click to expand...

I agree with your comment Julia as that is what I do as well....but it is still a loss is it not!!

You are not going to be 100% correct with all your trades but you are still going to be profitable in your strategy...That is how I read it anyway.:)
 
Triathlete said:
I agree with your comment Julia as that is what I do as well....but it is still a loss is it not!!
Click to expand...
Why don't I learn not to comment on this sort of stuff?:rolleyes:

I object to the original 'mantra' because it will be used by people who keep hoping that those dogs they're holding onto will one day turn around.
 
Triathlete said:
You are not going to be 100% correct with all your trades but you are still going to be profitable in your strategy...That is how I read it anyway.:)
Click to expand...
Would have to look it up, but from memory the quote from the Rich Dad, Poor Dad book was said in the context of the inertia that may arise from the expectation of perfectionism: ie. if you expect to win 100% of the time, then you will often be scared to do anything due to the fear of being wrong (even if it isn't as often as being right).
 
from FirstLinks. ... probably most have been seen elsewhere.

Who said these famous quotations (answers at the end)?

  1. “Pundits forecast not because they know but because they are asked.”
  2. “My two rules of investing: Rule one – never lose money. Rule two – never forget rule one.”
  3. "The four most dangerous words in investing are: 'This time it's different.'"
  4. “Go for a business any idiot can run because sooner or later, any idiot probably is going to run it.”
  5. “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
  6. “Markets can remain irrational longer than you can remain solvent.”
  7. "The stock market is filled with individuals who know the price of everything, but the value of nothing."
  8. "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
  9. “October. This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June December, August and February.”
  10. "The stockmarket has reached what looks like a permanently high plateau.”
  11. “Money is better than poverty if only for financial reasons.”
  12. “Conventional wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”
  13. “The markets generally are unpredictable, so that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”
  14. "In investing, what is comfortable is rarely profitable.”
  15. “For I don’t care too much for money, for money can’t buy me love.”
  16. “Diversification is a protection against ignorance. It makes very little sense to those who know what they are doing.”
  17. “I am not worried about the deficit. It is big enough to look after itself.”
  18. “You must not only learn to live with tension, you must seek it out. You must learn to thrive on stress.”
  19. “You never count your money when you’re sittin’ at the table. There’ll be time enough for countin’, when the dealin’s done.”
  20. “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."
.
.
And here are the answers:

  1. John Kenneth Galbraith
  2. Warren Buffett
  3. Sir John Templeton
  4. Peter Lynch
  5. J. Paul Getty
  6. John Maynard Keynes
  7. Phillip Fisher
  8. Warren Buffett
  9. Mark Twain
  10. Irving Fisher
  11. Woody Allen
  12. John Maynard Keynes
  13. George Soros
  14. Robert Arnott
  15. The Beatles
  16. Warren Buffet
  17. Ronald Reagan
  18. J. Paul Getty
  19. Kenny Rogers
  20. Alan Greenspan
 
Dona Ferentes said:
from FirstLinks. ... probably most have been seen elsewhere.

Who said these famous quotations (answers at the end)?

  1. “Pundits forecast not because they know but because they are asked.”
  2. “My two rules of investing: Rule one – never lose money. Rule two – never forget rule one.”
  3. "The four most dangerous words in investing are: 'This time it's different.'"
  4. “Go for a business any idiot can run because sooner or later, any idiot probably is going to run it.”
  5. “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
  6. “Markets can remain irrational longer than you can remain solvent.”
  7. "The stock market is filled with individuals who know the price of everything, but the value of nothing."
  8. "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
  9. “October. This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June December, August and February.”
  10. "The stockmarket has reached what looks like a permanently high plateau.”
  11. “Money is better than poverty if only for financial reasons.”
  12. “Conventional wisdom teaches that it is better to fail conventionally than to succeed unconventionally.”
  13. “The markets generally are unpredictable, so that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”
  14. "In investing, what is comfortable is rarely profitable.”
  15. “For I don’t care too much for money, for money can’t buy me love.”
  16. “Diversification is a protection against ignorance. It makes very little sense to those who know what they are doing.”
  17. “I am not worried about the deficit. It is big enough to look after itself.”
  18. “You must not only learn to live with tension, you must seek it out. You must learn to thrive on stress.”
  19. “You never count your money when you’re sittin’ at the table. There’ll be time enough for countin’, when the dealin’s done.”
  20. “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."
.
.
And here are the answers:

  1. John Kenneth Galbraith
  2. Warren Buffett
  3. Sir John Templeton
  4. Peter Lynch
  5. J. Paul Getty
  6. John Maynard Keynes
  7. Phillip Fisher
  8. Warren Buffett
  9. Mark Twain
  10. Irving Fisher
  11. Woody Allen
  12. John Maynard Keynes
  13. George Soros
  14. Robert Arnott
  15. The Beatles
  16. Warren Buffet
  17. Ronald Reagan
  18. J. Paul Getty
  19. Kenny Rogers
  20. Alan Greenspan
Click to expand...
I think rule number 2 is one of the most misunderstood quotes in all of finance, I would speculate that 90% of people that have ever heard Buffett say that don’t actually realise what he is trying to say.
 
verce said:
Can you elaborate for those of us who don't understand?
Click to expand...
For a start Buffett doesn’t consider the share price of his stocks going down as him losing money. But a lot of people that read and quote that saying interpret it as meaning don’t hold a stock whose share price is going down.

What Buffett actually means is “avoid permanent losses of capital” eg you don’t want to be in the situation where a large chunk of your capital is lost permanently.

Buffett is involved in valuing businesses and buying them at or below fair value. If he believes a business is worth $20 per share, he doesn’t care if the share price on the market drops below that value for a time, what he cares about is the valuation, he doesn’t want the valuation to drop.

It’s a major difference that most people miss, and misunderstanding it leads people to do all sorts of things Buffett would think are dumb.
 

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