Wisdom Wise
Fortune favours the prepared mind
Speculators, traders and even investors who do not have any strategies playing the stock market are likely to have a hard time trying to make money.
If you have been in the market for some time and find that you have not made any money, it's time for you to think hard why you have not been lucky so far. Is it because luck has been against you or because you have failed to plan well? Many people blame luck when they failed, but when they succeed, they say there are smart and skilful. This is human ego.
There may be some truth that some people are born lucky. If you relied on your luck to succeed, you are likely to fail because luck favours the prepared mind.
The worst thing that can happen to a novice is for him to make a lot of money immediately he enters the market because of a tip or because of luck. This is called the winner's curse. Very often the early winnings are the prelude to disastrous losses. Easy money leads you to become greedy and careless. Very soon you will realise that easy money is not easily made. If you bet what you can afford to lose, things may not be so bad, but if you borrow to bet, the result could be disastrous.
For those who are smart, they will first find out how they can win. How many market players do this? You can't win without having a competitive edge.
What is a competitive edge? Experience, knowledge, wisdom, patience and discipline put together will give you the competitive edge. Do you have them?
Do you know how to identify a good company for investment or a good time to enter a trade based on technical analysis.
Knowing fundamental and technical analysis will definitely give you an edge, simply because the majority of players in the market do not have such knowledge and skill.
The next important thing to know is to know your own traits. It is said that success in the stock market does not depend so much on your intelligence, but rather on your traits. Thomas Edison, one of the smartest men on earth failed miserably in the stock market. He said that he could calculate the movements of the stars, but he was unable to calculate the madness of man.
Know your own traits; know how much risk you can take; know whether you can cut loss without feeling the pain of losing. Once you know who you are, then think out a strategy to suit yourself. Never do anything without a strategy.
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Be the first to like this. Showing 11 of 11 comments
Knowing fundamental and technical analysis will definitely give you an edge, simply because the majority of players in the market do not have such knowledge and skill. - Somewhat true to a certain point.
Look at this way, stock market comsist of a pool of investors. Just like darwin natural selectiom theory that the one that can survive competition will pass their genes to the next generation, in stock market, investors that doesnt have fundamental and ta skills will lose money and overtime quite the game. Through this market natural selection, what do you get? A majority of investors with good enough skills to blunt your edge.
Then again, stock market consist a high element of luck. A newbie can blunt out your edge on his very first day. So what you jave here is in the short term, amateur and experienced players killing your edge and In the long term where all amateurs eventually die out after losing money, you have more experienced players killing your edge
2016-10-08 14:53
Whenever i see Ben Gan i remembered his classic buy call on gpharos n also his supporter CPTeh....shit..
2016-10-08 15:46
Ricky yeo your opinion seems to imply the stock market is a competitive sphere and a zero sum game. What if i just practise value based stock buying with a margin of safety when i found one. Collect dividend n wait for other to discover and chase the stock. As such, i devoid into competitive market, dont need to have edge, just bargain hunt n collect? Work?
2016-10-08 16:01
those who hv fa n ta skills will mostly last longer than those without...it is said that out of 100..95 will fail,4 do average n 1 do good...the question is how to be the one doing good?
well,don't be the 95 who fail for a start...DO NOT lose your capital...DO know how to cut loss.
i always tell the new and eager ones..before you win you need to know how to lose...ie. to cut loss n conserve capital.
then,the rest will follow...
2016-10-08 17:24
the author is quite right abt the winner's curse,those who hv been thru the 1999 internet bubble for stocks know..money just came out like frm the printing machine...and then...the rest is history.
so,to be a winner...you need to LAST.
2016-10-08 17:29
At one glance he seems to be a TA guy but i believe his success is well supported by his FA n mkt knowledge/strong mental quality etc
2016-10-08 17:30
Charles..for me..the most important thing is to be able to read the big boys' minds...haha...you enjoy ur weekend.
2016-10-08 17:33
Otb always claimed i only know badmouthing people in i3...he doesnt know there are only a few worths my compliment...rchi is certainly one of them
2016-10-08 17:33
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CS Tan
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
probability
simple and short, truly a valid advise above...on winner's curse and especially this one below:
"The next important thing to know is to know your own traits. It is said that success in the stock market does not depend so much on your intelligence, but rather on your traits."
2016-10-08 13:27