Hi guys,

I first read Reminiscences of A Stock Operator more than 10 years ago. An investment book on trading. Which is good to read and which I seldom follow. But there is one passage that I like very much. So I am sharing it here in i3 forum

From page 63

Studying my winning plays in Fullerton's office I discovered that although I often was 100 per cent right on the market---

that is, in my diagnosis of conditions and general trend----I was not making as much money as my market "rightness" entitled me to. Why wasn't it?

There was as much to learn as from partial victory as from defeat.

.For instance, I had been bullish from the very start of a bull market, and i had backed my opinion by buying stocks. An advance followed, as i had clearly foreseen. So far, all very well. But what else did I do? Why, I listened to the older statesmen and curbed my youthful impetuousness. I made up my mind to be wise and play carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock kiting up ten points more and I sitting there with my four point profit safe in my conservative pocket. They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market.

Where I should have made twenty thousand I made two thousand. That was what conservatism did for me.

In Fullerton's there were the usual crowd. All grades!  Well, there was an old chap who was not like the others. To begin with, he was a much older man. Another thing was he never volunteered advice and never bragged of his winnings. He was a great hand for listening attentively to the others. He did not seem very keen to get tips---that is, he never asked the talkers what they'd heard or what they knew. But when somebody gave him one he always thanked the tipster politely. Sometimes he thanked the tipster again ---when the tip turned out O.K. But if it went wrong he never whined, so that nobody could tell whether he followed it or let it slide by. It was a legend of the office that the old jigge was rich and could swing quite a line. But he wasn't donating much to the firm in the way of commissions; at least not everyone could see. His name was Partridge, but they nicknamed him Turkey behind his back, because he was so thick-chested and had a habit of strutting about the various rooms, with the point of his chin resting on his breast.

The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others, used to go to old Partridge and tell him what some friends of a friend of an insider had advised them to do in a certain stock. They would tell him what they had not done with the tip so he would tell them what they ought to do. Bt whether the tip they had was to buy or sell , the old chap's answer was always the same.

The customer would finish the tale of his perplexity  and then ask: "What do you think I ought to do?"

Old Turkey would cock hs head  to one side contemplate his fellow customer with a fatherly smile, and finally he would say very impressively. "You know, it's a bull market!"

Time and again I heard him say, "Well, this is a bull market, you know!" as though he were giving you a priceless talisman wrapped up in a million-dollar accident-insurance policy. And of course I did not get his meaning.

One day a fellow named Elmer Harwood rushed into the office, wrote out an order and gave it to the clerk. Then he rushed over to where Mr. Partridge was listening politely to John Fanning's story of the time he overheard Keene give an order to one of his brokers and all that John made was a measly three points on a hundred shares and of course the stock had to go up twenty-four points in three days right after JOhn sold out. It was at least the fourth time that John had told him that tale of woe, but old Turkey was smiling as sympathetically as if it was the first time he heard it.

Well, Elmer made for the old man and, without a word of apology to John Fanning, told Turkey. "Mr. Partridge, I have just sold my Climax Motors. My people say the market is entitled to a reaction and that I'ii be able to buy it back cheaper. So you'd better do likewise. That is, if you've still got yours."

Elmer looked suspiciously at the man to whom he had given the original tip to buy. The amateur, or gratuitious, tipster always thinks he owns the receiver of his tip body and soul, even before he knows how the tip is going to turn out.

"Yes, Mr. Harwood, I still have it. Of course!" said Turkey gratefully. It was nice of Elmer to think of the old chap.

"well, now is the time to take your profit and get in again on the next dip," said Elmer, as if he just made out the deposit slip for the old man. Failing to perceive enthusiatic graitude in the beneficiary's face Elmer went on: "I have just sold every share I owned!"

From his voice and manner you would have conservatively estimated it at ten thousand shares.

But Mr. Partridge shook his head regretfully and whined, "No! No! I can't do that!"

"What?" yelled Elmer.

"I simply can't!" said Mr. Partridge. He was in great trouble.

"Didn't I give you the tip to buy it?"

"You did, Mr. Harwood, and I am very grateful to you. Indeed, I am, sir. But---"

"Hold on!" Let me talk And didn't that stock go up seven points in ten days? Didn't it?"

"It did, and I am much obliged to you, my dear boy. But I couldn't think of selling that stock."

"You couldn't?" asked Elmer, beginning to look doubtful himself.  It is a habit for tip givers to be tip takers.

"No. I couldn't."

"Why not?" And Elmer dew nearer.

"Why, this is a bull market!" The old fellow said it as though he had given a long and detailed explanation.

"That's all right," said Elmer, looking angry because of his disappointment. "I know this is a bull market as well as you do. But you'd better slip them that stock of yours and buy it back on reaction. You might as well reduce the cost to yourself."

"MY dear boy," said old Partridge, in great distress---"my dear boy, if I sold that stock now I'd lose my position; and then where would I be?"

Elmer Harwood threw up his hands, shook his head and walked over to me to get sympathy: "Can you beat it?" he asked me in a stage whisper. "I ask you!"

I didn't say anything. So he went on:"I give him a tip on Climax Motors. He buys five hundred shares. He's got seven points' profit and I advise him to get out and buy 'em back on the reaction that's overdue even now. And what does he say when I tell him? He says that if he sells he'll lose his job. What do you know about that?"

"I beg your pardon, Mr. Harwood; I didn't say I'd lose my job," cut in old Turkey. "I said I'd lose my position. And when you are as old as I am and you've been through as many booms and panics as I have, you'll know that to lose your position is something nobody can afford; not even John D. Rockfeller. 

To be continued...

It never was my thinking that made big money for me. It always was my siting, Get that?  My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear market. i've known many men who were right at exactly the right time, and began buying or seling stocks when prices were at the very level which should show the greatest profit. 

And their experience invariably matched mine---that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest thing to learn.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do.

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight

In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks

---By Edwin Lefevre

Calvin comments:

"A most stupid thing to do in a rising bull stock is to sell it and let it go too early. Hoping to buy it back on retracement which never happen. Then let the bull slip and watch it run away!"

We are in a Oil&Gas Bull Run Time Now

So don't just sell for a small profit

If Dayang goes up... PENERGY (5133) Should Go Up In Tandem

See the Latitude Chart below:

At the outset of 2013 Latitude was only Rm1.00

Suppose some had sold at Rm1.50 after a 50% gain he would have lost his position

Will he buy it back at Rm2.00? Most probably not

What if Latitude had crossed Rm3.00? He definitely would not enter again & missed the rest of the rally till Latitude reached the high of Rm8.00

So don't simply sell a bull Stock if the bull is still young

Learn to buy & sit still (Especially in OGSE stocks)

LATITUDE TREE HOLDINGS BERHAD [S] (7006)

Company Website 
Annual Report 
General Meetings

Chart Period: