Alex1Powell Categories Trading
7 days
30 days
All time
Recent
Popular
At a time when Buffett is being criticised for his style, again, I can't help but admire the investor & the person. Can't help but want to be more like him.
"Buy a company because you want to own it, not because you want the stock to go up."
Some excerpts:
👇
"Buy stocks for simple reasons, not torturous & sophisticated ones".
Eventually the thesis for a good investment boils down to 2-3 simple points. You have to do a lot of work to figure out what those are & why.
2/
Even Buffett has struggled with & changed his exit decisions. This I believe is a much tougher problem than the buy decision.
3/
1969 article: He has made a fortune and is no longer motivated to count boxcars and read statistical manuals. He comes close to the truth when he says: “You shouldn’t be doing at 60 what you did at 20.”
90 & still counting box-cars.
4/
He attributes his problem to a market that no longer lends itself to his kind of analysis, where real values are hard to find. - 1969
It has been 50 years since we are debating whether the market values "this kind of analysis".
"This kind of analysis" is all that there is.
5/
"Buy a company because you want to own it, not because you want the stock to go up."
Some excerpts:
👇
Excellent compilation of Forbes articles on Warren Buffet from 1969 to 2000s. h/t @valuewalk \U0001f44f@dmuthuk @Gautam__Baidhttps://t.co/V7uTYjwSrn pic.twitter.com/GPDyuk7WGB
— Ram Bhupatiraju (@RamBhupatiraju) December 5, 2020
"Buy stocks for simple reasons, not torturous & sophisticated ones".
Eventually the thesis for a good investment boils down to 2-3 simple points. You have to do a lot of work to figure out what those are & why.
2/
Even Buffett has struggled with & changed his exit decisions. This I believe is a much tougher problem than the buy decision.
3/
1969 article: He has made a fortune and is no longer motivated to count boxcars and read statistical manuals. He comes close to the truth when he says: “You shouldn’t be doing at 60 what you did at 20.”
90 & still counting box-cars.
4/
He attributes his problem to a market that no longer lends itself to his kind of analysis, where real values are hard to find. - 1969
It has been 50 years since we are debating whether the market values "this kind of analysis".
"This kind of analysis" is all that there is.
5/
Some reflections on trading psychology...
1/
Trading is as simple as "do you think it will go up or do you think it will go down", yet this is one of the hardest jobs I've ever experienced and I've been lucky (or so I'm told) to have experienced a few - musician, pe associate, baker, biz owner, insurance underwriter.
2/
But with this simplistic binary proposition comes a tremendous amount of pitfalls which is well explained imv by Daniel Kahneman’s book “thinking fast and slow”, that illustrates a lot of why traders succumb to these pitfalls time and time again...
3/
And that is, Humans are innately horrible (horrible) traders. And it's no wonder why trading has an extremely low success rate. As I've come to realise from reading that book some years ago, we - Humans, tend be risk-averse when winning, that is to say...
4/
we tend to take our profits or whatever we have gained quickly; and tend to be risk-seeking when losing in that we tend to let our losses or whatever we may lose a chance (or give more risk) to recoup what we could end up losing.
5/
1/
Was out tonight - great cocktails whiskey wine, all alone and didn't indulge in the people or beautiful women around me, instead I jotted down some notes after reflecting on trading psychology quite a bit this past week. Will expand on this once I come out of my daze...
— DoejiStar (@DoejiStar) December 12, 2020
Trading is as simple as "do you think it will go up or do you think it will go down", yet this is one of the hardest jobs I've ever experienced and I've been lucky (or so I'm told) to have experienced a few - musician, pe associate, baker, biz owner, insurance underwriter.
2/
But with this simplistic binary proposition comes a tremendous amount of pitfalls which is well explained imv by Daniel Kahneman’s book “thinking fast and slow”, that illustrates a lot of why traders succumb to these pitfalls time and time again...
3/
And that is, Humans are innately horrible (horrible) traders. And it's no wonder why trading has an extremely low success rate. As I've come to realise from reading that book some years ago, we - Humans, tend be risk-averse when winning, that is to say...
4/
we tend to take our profits or whatever we have gained quickly; and tend to be risk-seeking when losing in that we tend to let our losses or whatever we may lose a chance (or give more risk) to recoup what we could end up losing.
5/