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Re: louisgray.com: This Financial Scenario Says There Are No Experts

Don Farrish — Tue, 07 Oct 2008 12:43:51 -0000

I have watched your blog for sometime in my google reader and felt compelled to comment this time. Too true as the Long Term hold scenario of the past rarely works now in this world of too much information and misinformation controlling the emotions of the investors in the market every which way making it difficult to predict any patterns or trends.

I have an article for you to look at my brother wrote (Money Manager) that you might find beneficial called Volatile Markets Demand Discipline.

http://letstalkmoneyblog.co...

This is not meant to hijack your article or provide link backs but he teaches sound advice for use in any market and I truly believe in his message.

Re: louisgray.com: This Financial Scenario Says There Are No Experts

Byron Gibson — Thu, 02 Oct 2008 13:48:21 -0000

I strongly suggest you read the book 'What I learned Losing a Million Dollars', by Jim Paul and Brendan Moynihan, recommended by Nassim Taleb (also worth reading). The central argument is that there are many different ways of making a killing trading or investing, but the one single thing they all have in common is Don't Lose Money! Simply, if you make a trade or investment, and the market goes against you, suck it up, get out, re-evaluate why your thesis was incorrect - plain wrong? bad timing? something else? - and preserve enough capital to try again.

The problem with taking loses is that every % loss requires a much larger % gain just to get back to even. Say you think now is a good time to buy Apple after it has fallen 20%, and you invest $100, but it keeps falling with the bear market, all the way down to $50. You've just taken a %50 loss, but that isn't the worst part. The worst part is that in order to get back to your original investment $100 from $50, you have to make a 100% gain. That is brutal math, especially when even in good times you're lucky to get 15%-20% returns.

Hence, it's more effective to study and understand the psychology of loss-making so that you can avoid it, and that is what this book is about.

Re: louisgray.com: This Financial Scenario Says There Are No Experts

Webomatica — Tue, 30 Sep 2008 14:49:20 -0000

I also lost a lot of money in the web 1.0 debacle, but how it changed my investment approach is quite the opposite of yours - I only invest for the long term (5 years plus), and have avoided individual stocks for the most part. A good example is our beloved AAPL which I've held since 2000.

Re: louisgray.com: This Financial Scenario Says There Are No Experts

The Gaffer — Tue, 30 Sep 2008 06:29:30 -0000

The only expert I've seen throughout this financial crisis is Martin Weiss, a financial market analyst who has been warning people about this impending crisis for more than a year. Last week he published a white paper that was submitted to Congress entitled "Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market."

See http://tinyurl.com/3f54ty for more details.