Investing Book for H.S. Grad?

[Yodean]

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!
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It should have been Handegg but they didn't like the way it rolled off the tongue.
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BTW, your technical analyses has been great. Nice recent call on oil - I didn't think it would drop below 80 on an interim basis.

Do you think USD can close above 115 on a weekly basis? I had thought the 110 - 112 range would hold.

[Triplethought]

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.

I just ordered on amazon. says it's the 2005 edition. Thanks guys.

[Yodean]

I just ordered on amazon. says it's the 2005 edition. Thanks guys.

Assuming you're referring to _The Zurich Axioms_; suspect you'll quite enjoy it.

[Triplethought]

I just ordered on amazon. says it's the 2005 edition. Thanks guys.

Assuming you're referring to _The Zurich Axioms_; suspect you'll quite enjoy it.

Received my copy yesterday. Not sure why it took so long. I've read through chapter 4 and I must say it's an interesting perspective. He says investing is speculation (ie gambling) so get over it. Talk of "investment grade" stocks and careful money managers is BS (they are all taking risks). He basically says you're not going to get rich taking small bets with low risk and for aggressive investors diversification is over rated. I like how he says put 2-3 eggs in 1 basket and then watch the basket carefully. I plan to reduce my number of plays significantly based on this advice. One of the axioms is basically don't trust gurus because no one knows the future. Cracked me up how he discusses Nostradamus techniques such as "make lots of predictions and a few will hit" and "use vague language". Some of these lessons he touts have been given by SOL in different forms (pigs get slaughtered etc), some are more aggressive than Sol's lessons. Other lessons he teaches like don't put any faith in charts or history run contra to SOLs strategy. In my mind the TI philosophy is essentially "chartists" at it's base, with the obligatory and ever present nod to the vague religion of "mass psychology"- (whatever that means). As an aside I think it's funny how often we discuss mass psychology with no tangible examples. Well maybe a few such as the news cycle and not believing conventional wisdom but that advice is specifically vague enough to not be useful. Perhaps my next book should be on mass psychology so I know what SOL is going on about. anyone like this one? https://www.amazon.com/Investors-Make-M ... 0964968908 But one thing I've learned is "if you can't explain it to someone who has the fundamental ability to understand you don't understand it yourself".

I'm realizing with my real estate and now small business purchases in the last 2 years that I've taken the kinds of risks he discusses that really matter. And true to what the Zurich Axioms says these plays have (so far) resulted in returns that are way beyond what the average stock market return give.

I might do a full summary of the axioms at some point. But they don't make as much sense without the chapters backing them up. I think this level of risk taking isn't for everyone at all ages. Seems more like a young man's investor psychology book. (Go big or go home - spend all you want because if you lose you can always make more). Unfortunately some of the aggressiveness this book encourages can mean a lot of people who take this advice could go home broke. Because he admits there is a certain amount of luck to those who succeeded this way (JP Getty story)

But this is a must read book for investors I think, even if you don't buy all the axioms. It's obviously difficult to understand how to translate the advice into any specific modern investment. I wish he gave more examples but maybe that's coming in later chapters.

[harryg]

It is at its heart, a book about embracing and then managing risk. In my view that is the cornerstone of speculation ('investing', if you like). Probably also of business, perhaps all worthwhile human endeavour? Mmm.

Not everyone wants to do that. In fact if I remember correctly, the book says something like "This is a book about betting to win. Everyone wants to win, but not everyone wants to bet".

I think I was fortunate to read it when I was just starting out, because I come from a background where risk was never discussed. It was probably feared, I don't know. If anyone had had any money, I expect the advice would have been to put it in a bank. This book says that if you want to get anywhere (and not just financially), you are going to have to take a risk. I believe that, so the book suited me.

I don't remember it as encouraging aggressive risk as such, but it does discourage avoidance of risk.

It does not contain concrete examples of what to do specifically - it's more guidelines of how to manage what you do. For example, there is a very interesting chapter on not holding onto a losing proposition. The example given is that of a couple purchasing a house. For most people that is their single biggest lifetime expenditure, but not many think of it in risk terms.

[Yodean]

I think this level of risk taking isn't for everyone at all ages. Seems more like a young man's investor psychology book. (Go big or go home - spend all you want because if you lose you can always make more).

The later chapters go into a bit more about handling risk, as Harry mentioned.

The parts about not waiting for the Titanic to sink - jump off early!

There are examples of when to take a loss - more specifically, when an investment falls in the neighborhood of 15% to 20% off of the highest price during the time at which _you_ held that investment. I found this idea interesting, but have not quite applied it yet.

My basic thesis for when to take a loss as far as investments are concerned is that one is best taking a small loss early, or if one has conviction in a certain investment, be willing to just HODL through a big drawdown - as I suspect many of us here are doing so currently.

Both approaches could work, if done well. Of course, depends on the specifics of the assets under consideration.

I think the worst thing to do is to get caught in that middle zone ... i.e. taking a medium-sized losses quickly.

[Eric]

In fact if I remember correctly, the book says something like "This is a book about betting to win. Everyone wants to win, but not everyone wants to bet".

That's in the foreword I believe. I'm only half way through the first chapter (hard to read attentively with 1 and 4 year olds around). Wish I had read this 20 years ago.

[AstuteShift]

Mass psychology is very simple

Buy into panic and fear, sell into euphoria

Real estate imho is a scam and I hate bankers with a passion. I refuse to give them any money or do business with them. I’d rather be in REITS and have the leeches pay me dividends instead

Instead of thinking about massive gains, you analyze market risk

If the market is not clear then it’s best to wait for confirmation.

You keep it simple. You don’t blame others for your mistakes with your money. Having an ego in trading is absolutely worthless and will destroy you externally and internally