Can we STOP with the Predictions?

Too many talking heads and so-called market experts continue to make predictions on the market, the economy and the general direction of this country (and the world for that matter). I can’t stand predictions (except for Plaxico Burress’ prediction prior to the Super Bowl last week – Go Giants).

I have compiled a list of excellent quotes to combat the constant bombardment of predictions on television, in magazines, on blogs, the internet and on the nightly news; I love quotes and agree with the ones below 110%!

Try and predict the market while trading and you will go broke, that I can predict with certainty. The men and women below couldn’t have been more correct when speaking of the ignorant dopes that try to predict everything in life! When will the predictors learn to shut up? I know: when idiots stop listening to them and paying for their garbage (see best seller doomsday list).

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Enjoy, it’s a fun post today!

  • “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.” – Lao Tzu
  • “He who knows, does not speak. He who speaks, does not know.” – Lao Tzu
  • “Never make predictions, especially about the future.” – Casey Stengel
  • “Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.” – Peter Drucker
  • “If one could foresee the next three days, one could become rich for several thousand years.” – Anonymous
  • “If you learn one thing from having lived through decades of changing views, it is that all predictions are necessarily false.” – M. H. Abrams
  • “I figure lots of predictions is best. People will forget the ones I get wrong and marvel over the rest.” – Alan Cox (the MEDIA!)
  • “History can predict nothing except that great changes in human relationships will never come about in the form in which they have been anticipated.” – Johan Huizinga
  • “You can only predict things after they have happened.” – Eugene Ionesco
  • “In the future, instead of striving to be right at a high cost, it will be more appropriate to be flexible and plural at a lower cost. If you cannot accurately predict the future then you must flexibly be prepared to deal with various possible futures.” – Edward de Bono
  • “You never know what the next day is going to bring. That goes for football, goes for off the field, and I gave up a long time ago trying to predict the future and trying to deal with things I couldn’t deal with.” – Brett Favre
  • “Predictions of the future are never anything but projections of present automatic processes and procedures, that is, of occurrences that are likely to come to pass if men do not act and if nothing unexpected happens; every action, for better or worse, and every accident necessarily destroys the whole pattern in whose frame the prediction moves and where it finds its evidence.” – Hannah Arendt
  • “To predict the behavior of ordinary people in advance, you only have to assume that they will always try to escape a disagreeable situation with the smallest possible expenditure of intelligence.” – Friedrich Nietzsche
  • “The unpredictability inherent in human affairs is due largely to the fact that the by-products of a human process are more fateful than the product.” – Eric Hoffer
  • “My predictions are notably inaccurate.” – Robert Caro

And Finally…

  • “The best way to predict the future is to invent it.” – Alan Kay

How to Trade in Stocks by Jesse Livermore

I am not sure what the market is going to do to open the week so instead of posting a new stock screen, I’ll give it a day and entertain with a few quotes from Jesse Livermore’s book How to Trade in Stocks (one of my favorites, originally written in 1940). Pay particular attention to the first quote!

  • “Successful traders always follow the line of least resistance – follow the trend – the trend is your friend”
  • “Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes”
  • “Just because a stock is selling at a high price does not mean it won’t go higher”
  • “It cannot be said too often that in speculation and investment, success comes only to those who work for it”
  • “I have long since learned, as all should learn, not to make excuses when wrong. Just admit it and try to profit by it. We all know when we are wrong. The market will tell the speculator when he is wrong, because he is losing money. When he first realizes he is wrong is the time to clear out, take his losses, try to keep smiling, study the record to determine the cause of his error, and await the next big opportunity. It is the net result over a period of time in which he is interested”
  • “But careful timing is essential…impatience is costly”
  • “The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements”
  • “All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope – that is why the numerical formations and patterns recur on a constant basis”
  • “The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor.”
  • “Markets are never wrong – opinions often are”
  • “Remember too that it is dangerous to start spreading out all over the market. By this I mean, do not have an “Interest in too many stocks at one time. It is much easier to watch a few than many. I made that mistake years ago and I cost me money”
  • “There is nothing more important than your emotional balance”

Other books related to Jesse Livermore:

Inspiration

THINK IT

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“What the mind of man can Conceive and Believe, it can Achieve.” – Napoleon Hill

“You become what you think about all day long” – Ralph Waldo Emerson

“You are today where your thoughts have brought you, you will be tomorrow where your thoughts take you.” – James Allen

“Do not think of knocking out another person’s brains because he differs in opinion from you. It would be as rational to knock yourself on the head because you differ from yourself 10 years ago.” – Horace Mann, educator – How many traders feel this way?

BELIEVE IT

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“You can have anything you want. There are no limits to your possibilities.” – unknown

“Whether you believe you can do a thing or not, you are right.” – Henry Ford

“One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn’t do.” – Henry Ford

“We must walk consciously only part way toward our goal and then leap in the dark to our success.” — Henry David Thoreau

SEE IT

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“If one advances confidentially in the direction of his dreams, and endeavors to live the life he has imagined, he will meet with a success unexpected in common hours.” – Henry David Thoreau

“Your biggest competitor is your own view of your future.” – Jim Taylor

“A person is limited only to his or her reality of what is possible financially. Nothing changes until that person’s reality changes. And a person’s financial reality will not change until he or she is willing to go beyond the fears and doubts of her own self-imposed limits.” – Robert T. Kiyosaki

LOVE IT

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“The average person puts only 25 percent of his energy and ability into his work. The world takes off its hat to those who put in more than 50 percent of their capacity, and stands on its head for those few and far between souls who devote 100 percent.” — Andrew Carnegie

“You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don’t have that kind of feeling for what it is you’re doing, you’ll stop at the first giant hurdle.” – George Lucas”

“If all you’re receiving for your work is money you’re being grossly underpaid.” -Alan Cohen

[Read more...]

Mastering the Trade, quotes by John F. Carter

The quotes below are provided by John F. Carter, master day trader; pulled directly from his new book Mastering the Trade.

This may be the best quote of all:
“The financial markets are naturally set up to take advantage of and prey upon human nature. As a result, markets initiate major intraday and swing moves with as few traders participating as possible. A trader who does not understand how this works is destined to lose money”

“The financial markets are truly the most democratic places on earth. It doesn’t matter if a trader is male or female, white or black, American or Iraqi, Republican or Democrat. It’s all based on skill.”

“A trader, once in a position, can deceive himself or herself into believing anything that helps reinforce the notion that he or she is right”

“…professional traders understand this all too well, and they set up their trade parameters to take advantage of these situations, specifically preying on the traders who haven’t figured out why they lose”

“…markets don’t move because they want to. They move because they have to.”

“After all, the money doesn’t just disappear. It simply flows into another account – an account that utilizes setups that specifically take advantage of human nature.”

“As soon as Wall Street announces a special vehicle for trading a particular market or strategy, then that market or strategy is done for.”

“Remember, the markets are set up to naturally take advantage of and prey upon human nature, moving sharply only when enough people get trapped on the wrong side of a trade.”

“In casinos, as in trading, it takes only one stupid bet to blow the whole wad”

“Casino owners know this, and this is why they sell the strategy books right there on the property, prominently displayed in their own gift shops”

“This is the biggest poker game on the planet, and the money flowing into your account isn’t appearing as if by magic. It’s coming from someone who is still learning how the markets work, and who most likely followed his or her gut and got suckered into taking the wrong side of the trade.”

“The problem is that tactics an individual uses to achieve his or her goals in everyday life do not work in trading, and in fact are one of the main reasons for failure.”

“The determination, positive thinking, and stubbornness that made people a success in one area of their life simply sets them up for slaughter in the markets”

“The markets thrive on taking the rules and ideals that govern general society, wadding them up into a ball, lighting them on fire, and then shoving them down a new trader’s throat.”

And Finally

“The only people who understand traders are other traders”

The book is full of excellent quotes such as these but it goes even deeper into how to trade like a professional and why the markets prey upon human nature. It was an excellent read and I will be going through it several more times to pick up everything I missed on the first go-around!

Piranha