Investing Book for H.S. Grad?

[bpcw]

For an 'investment' book I would recommend "The Zurich Axioms" by Max Gunther.

Harry's got a lot of deep experience both in the markets and life, and has a bit of that stereotypical British restraint, so I tend to consider his ideas/posts more seriously than most others'.

Very early on when he joined this forum (I knew Harry before he joined here), Harry recommended that I read _The Zurich Axioms_ by Max Gunther (in DM, then he also posted this particular recommendation publicly).

I finally got to reading this book recently, and am now reading it a second time. Plan on slowly re-reading it at least 5+ times, take a long break, and then read it again.

It's simply the best investing book I have ever read. Also quite short, and easy to read. The Bible of investing, at least for me.

Will benefit every investor, but prolly the intermediate level or higher ones the most, since they will be able to see the deeper ramifications of the Axioms.

I went through all of my big losses in 20+ years of investing, and there have been many - in every single case, it was because I violated one of the Major or Minor Axioms described in the book.

I also went through all of my big wins - lots of those, as well - and in most cases, they were because I followed the Axioms. Sometimes I just got really, really lucky, when I previously thought it was my genius ... lolol.

Thanks Harryg!

Can't recommend this book highly enough ...

https://www.amazon.ca/Zurich-Axioms-Har ... C77&sr=8-2

nfa!

Have just purchased, thank you Yodean & Harryg!

[Yodean]

Have just purchased, thank you Yodean & Harryg!

You are welcome. Interested to hear your thoughts about the book after you have read it.

[Budge]

Have just purchased, thank you Yodean & Harryg!

You are welcome. Interested to hear your thoughts about the book after you have read it.

Thanks guys, also have it on order (but the 1992 edition). After reading, I might get the current edition to see changes/updates.

[Yodean]

*****
Opinions on RSI and stochastics etc?

I think these indicators are nearly worthless.

Are they "bogus indicators"?

Yes, they're close to zero in terms of their profit expectations. What these patterns make during market consolidations, they lose during trends.

Why do you believe these approaches are so popular if they 're ineffective?

The human eye tends to pick up the times these indicators accurately called minor tops
and bottoms, but it misses all the false signals and the extent to which they were wrong during trends.

Losing habits

One common adage that is completely wrongheaded is: You can't go broke taking profits.
That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain.

What really matters is the long-run distribution of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work.

Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely are both attempts to make current positions more likely to succeed to the detriment of long-term performance.

***************************************************************************************************************************

Harryg and I were discussing a few financial topics and he sent me the above excerpt from _New Market Wizards_, with William Eckhardt opining above.

I think it is quite good - whether one completely agrees or not, it is wholesome, organic, grassfed, non-GMO, non-PUFA-laced, minimally processed food for thought, for the astute investor looking to constantly improve.

The excerpt is going into my TIJ (Trading-Investing Journal).

[Budge]

*****
Opinions on RSI and stochastics etc?

I think these indicators are nearly worthless.

Are they "bogus indicators"?

Yes, they're close to zero in terms of their profit expectations. What these patterns make during market consolidations, they lose during trends.

Why do you believe these approaches are so popular if they 're ineffective?

The human eye tends to pick up the times these indicators accurately called minor tops
and bottoms, but it misses all the false signals and the extent to which they were wrong during trends.

Losing habits

One common adage that is completely wrongheaded is: You can't go broke taking profits.
That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain.

What really matters is the long-run distribution of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work.

Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely are both attempts to make current positions more likely to succeed to the detriment of long-term performance.

***************************************************************************************************************************

Harryg and I were discussing a few financial topics and he sent me the above excerpt from _New Market Wizards_, with William Eckhardt opining above.

I think it is quite good - whether one completely agrees or not, it is wholesome, organic, grassfed, non-GMO, non-PUFA-laced, minimally processed food for thought, for the astute investor looking to constantly improve.

The excerpt is going into my TIJ (Trading-Investing Journal).

My 2c

This is why you need indicators that complement. Momo indicators like stochastics can sometimes remain at the extreme far longer than anticipated. This is why I use ADX. If ADX is going up, I know momo indicators will be at the extreme and will remain there until the ADX levels or turns down.

[Eric]

*****

Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely are both attempts to make current positions more likely to succeed to the detriment of long-term performance.

***************************************************************************************************************************

I'm guilty of the first sin for sure! I'm all over the place on the second sin but working on it and getting much better about having (and sticking to) an exit plan.

Of course I haven't kept a trading journal or notes so it would be a prohibitive amount of work to verify but I justify committing the first sin by all the times where I held past a stop loss and ended up turning a profit... Then again I also have a portfolio full of turds that should have been sold long ago so the funds could have been doing something productive.

[outof thebox]

*****

Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely are both attempts to make current positions more likely to succeed to the detriment of long-term performance.

***************************************************************************************************************************

I'm guilty of the first sin for sure! I'm all over the place on the second sin but working on it and getting much better about having (and sticking to) an exit plan.

Of course I haven't kept a trading journal or notes so it would be a prohibitive amount of work to verify but I justify committing the first sin by all the times where I held past a stop loss and ended up turning a profit... Then again I also have a portfolio full of turds that should have been sold long ago so the funds could have been doing something productive.

Experience provides us with a lot of lessons on how to tackle the next move provided we are not insolvent by that stage. However, I think there is no one formula fits all. In my options account, it has gone by at least 60% several times over the past decade, but overall it has beaten all my other trading accounts, for one simple reason. When you win you win big on options. You can lose 100% but your upside is unlimited.

Also on not going bankrupt on banking profits it is true. However if you always sell too fast and hold losers for too long then it could bite you in the ass. The answer is portfolio management

[Yodean]

Then again I also have a portfolio full of turds that should have been sold long ago so the funds could have been doing something productive.

You know that saying: "if it were easy, everyone and her grandmother would be doing it."

[MarkD]

Then again I also have a portfolio full of turds that should have been sold long ago so the funds could have been doing something productive.

You know that saying: "if it were easy, everyone and her grandmother would be doing it."

I believe, "...everyone and her grandmother IS doing it."

[Yodean]

I believe, "...everyone and her grandmother IS doing it."

This bodes well - like playing high stakes poker with a bunch of noobs at your table.

Of course, noobs are often lucky, in the beginning ...

[Budge]

Then again I also have a portfolio full of turds that should have been sold long ago so the funds could have been doing something productive.

You know that saying: "if it were easy, everyone and her grandmother would be doing it."

I believe, "...everyone and her grandmother IS doing it."

Just like Beardstown Ladies Club. Became a sensation until it was discovered whoever compiled their results was mathematically challenged. Oh dear, so sad.

[bpcw]

Have just purchased, thank you Yodean & Harryg!

You are welcome. Interested to hear your thoughts about the book after you have read it.

Here goes then:

Overall I enjoyed the book and it was an easy read with good examples of those in particular who have been unsuccessful.

It is mainly about the mistakes that investors make rather than a how to get rich book and has no TA or methodology but hugely valuable from that perspective alone.

It's basic tenet of the book is that you want to get rich so don't make these mistakes. It starts with the assumption that getting rich equals success and that anything else is substandard which a lot of people on the forum would know I totally disagree with and would go as far as to say that to be well off and to keep on striving for more money for its own sake is a wasted life, but from that point on I think the book is very worthwhile and relevant for investing at any level.

[Yodean]

to keep on striving for more money for its own sake is a wasted life, but from that point on I think the book is very worthwhile and relevant for investing at any level.

Thanks for the review.

Money isn't everything - it's the ONLY thing.

[bpcw]

to keep on striving for more money for its own sake is a wasted life, but from that point on I think the book is very worthwhile and relevant for investing at any level.

Thanks for the review.

Money isn't everything - it's the ONLY thing.

Reminds me of another quote:

Football's (soccer for those who called another sport by the same name 800 years later! ) not a matter of life and death you know, it's more important than that!

[chippermon]

[/quote]

Reminds me of another quote:

Football's (soccer for those who called another sport by the same name 800 years later! ) not a matter of life and death you know, it's more important than that!
[/quote]

It should have been Handegg but they didn't like the way it rolled off the tongue.