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Microcap & Penny Stocks : Tonto and Janice Teach Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (158)	3/29/1999 11:40:00 AM
From: Henry Volquardsen	Read Replies (3) \| Respond to of 302

Sam, I cannot take full credit for The market can stay irrational longer than you can stay solvent. I first heard it from A Gary Schilling and he may have heard it elsewhere as well. The quote is on my profile. It has been my experience that people who fall victim to an Awful Mistake after a long period of success are victims of hubris. Success can be heady stuff. People start to think they are infallible and forget the discipline that got them there. The Awful Mistake can be avoided if one exercises proper diversification, controls leverage and uses the discipline to maintain stringent stops. The Awful Mistake becomes fatal when these rules are violated. Plays start getting to big, to concentrated and stops get ignored. Hubris is the biggest enemy of successful traders.

To: Sam who wrote (158)	3/29/1999 4:17:00 PM
From: Janice Shell	Respond to of 302

Well, yes. Look at what happened to Niederhoffer. Ideally, naked writes wouldn't be the ONLY thing you did. But I can understand the temptation to go in more heavily when things were going well. And then... Does anyone have a link for a REAL and full explanation of what happened to Niederhoffer? I read some garbled accounts in the press, but the people who wrote 'em didn't seem to understand the difference between futures and options. As I (by now only very vaguely) recall, he wrote a whole lotta OEX puts. But when? By some accounts, in July, which would have made some sense. By others, in September, which would have made none at all. But in any case he didn't cover, even as disaster loomed. And so on Grey Monday he got creamed. I was short the OEX that day, and for about three sessions before. The one and only brilliant market play I've managed in years.