More Memorable Quotes from Reminiscences Of A Stock Operator
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It was never my thinking that made big money for me. It was my sitting. It is no trick at all to be right on the market. You always finds lots of early bulls in a bull market and early bears in a bear market.Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after this that a stock operator can make big money. it is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of ignorance.
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Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is at an end.
To do this you must study general conditions and not tips or special factors affecting individual stocks. get out for keeps! Wait until you see - or if you prefer, until you think you see - the turn in the market; the beginning of a reversal of general conditions.
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Give up trying to catch the last eighth - or the first. These two are the most expensive eighths in the world.
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Without faith in his own judgment no man can go very far in this game. That is about all I have learned - to study general conditions, to take a position and stick to it.
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From then on I began to think of basic conditions instead of individual stocks. I promoted myself to a higher grade in the hard school of speculation.
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Remember that stocks are never to high for you to begin buying or too low to begin selling.
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That is where the tape comes in - to enable you to decide as to the proper time for beginning. Much depends upon beginning at exactly the right time.
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The moment I ceased to be satisfied with merely studying the tape I ceased to concern myself exclusively with the daily fluctuations in specific stocks, and when that happened I simply had to study the game from a different angle. I worked back from the quotation to first principles; from price fluctuations to basic conditions.
The analysis of the week that had passed was less important to me than the forecast of the weeks that were to come.
For years I had been the victim of an unfortunate combination of inexperience, youth and insufficient capital.
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If you begin right you will not see your profitable position seriously menaced; and then you will find no trouble in sitting tight.
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I didn't wait to determine whether or not the time was right for plunging on the bear side. On the one occasion when I should have invoked the aid of my tape reading I didn't do it.
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The public, with their eyes fixed on the stock market, saw little - that week. The wise stock operators saw much - that year. That was the difference.
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A speculator must not merely be a student, he must be both a student and a speculator.
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Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them up so as to be able to anticipate probabilities.
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I knew that some day I would find out what was wrong and I would stop being wrong. I would then have not alone the will to be right but the knowledge to insure my being right. And that would mean power.
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A loss never bothers me after I take it. I forget it overnight. But being wrong - not taking a loss - that is what does damage to the pocketbook and to the soul.
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The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest, but to profit by either a rise or fall in the price of whatever he is speculating in. Therefore the thing to do is to determine the line of least resistance at the moment of trading; and what he should wait for is the right moment when the line defines itself, because that is his signal to get busy.
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In a narrow market, when prices are not getting anywhere to speak of but move in a narrow range, there is no sense in trying to anticipate what next big movement is going to be - up or down.
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Instead of hoping he must fear and instead of fearing he must hope.He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.
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A man may beat a stock or group at a certain time, but no man living can beat the stock market!
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That is one trouble about trading on a large scale. You can not sneak out as you can when you pike a long. You can not always sell when you wish or when you think it is wise. you have to get out when you can ; when you have the market that will absorb your entire line.
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I play a lone hand by choice and also because it is the wisest and cheapest way to trade.I get my pleasure out of matching my brains against other traders - men whom I have never seen and have never talked to and never advised to buy or sell and never expect to meet or know.When I make money I make it backing my own opinions. I don't sell them or capitalize them. I am interested in the game only as I play it for myself and in my own way.
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A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets.
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For three weeks my average profit was 150% per week. From then on a steadily increasing scale.
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I learned that the weaknesses to which a speculator is prone are almost numberless.
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Among the hazards of speculation the happening of the unexpected - I might even say of the un expectable - ranks high.
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Observation, experience, memory and mathematics - these are what the successful trader must depend on. |
