The
Golden Rules of Competitiveness.
What
countries must do to become or stay competitive:
1.
Create a stable and predictable legislative environment.
2.
Work on a flexible and resilient economic structure.
3.
Invest in traditional and technological infrastructure.
4.
Promote private savings and domestic investment.
5.
Develop aggressiveness on the international markets as well as
attractiveness for foreign direct investment.
6.
Focus on quality, speed and transparency in government and administration.
7.
Maintain a relationship between wage levels, productivity and
taxation.
8.
Preserve the social fabric by reducing wage disparity and strengthening
the middle class.
9.
Invest heavily in education, especially at the secondary level,
and in the life-long training of the labor force.
10.
Balance the economies of proximity and globality to ensure substantial
wealth creation, while preserving the value systems that citizens
desire.
From
IMD World Competitiveness Yearbook 2003, Stephane Garelli,
2003, IMD.
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Principles
of World Competitiveness.
I.
Economic
Performance
1.
Prosperity of a country reflects its past economic performance.
2.
Competition governed by market forces improves the economic performance
of a country.
3.
The more competition there is in the domestic economy, the more
competitive the domestic firms are likely to be abroad.
4.
A country's success in international trade reflects competitiveness
of its domestic economy (provided there are no trade barriers).
5.
Openness for international economic activities increases a country's
economic performance.
6.
International investment allocates economic resources more efficiently
worldwide.
7.
Export-led competitiveness often is associated with growth-orientation
in the domestic economy.
II.
Government Efficiency
1.
State intervention in business activities should be minimized,
apart from creating competitive conditions for enterprises.
2.
Government should, however, provide macroeconomic and social conditions
that are predictable and thus minimize the external risks for
economic enterprise.
3.
Government should be flexible in adapting its economic policies
to a changing international environment.
4.
Government should provide adequate and accessible educational
resources of quality and develop a knowledge-driven economy.
III.
Business Efficiency
1.
Efficiency, together with ability to adapt to changes in the competitive
environment, are managerial attributes crucial for enterprise
competitiveness.
2.
Finance facilitates value-adding activity.
3.
A well-developed, internationally integrated financial sector
in a country supports its international competitiveness.
4.
Maintaining a high standard of living requires integration with
the international economy.
5.
Entrepreneurship is crucial for economic activity in its start-up
phase.
6.
A skilled labor force increases a country's competitiveness.
7.
Productivity reflects value-added.
8.
The attitude of the workforce affects the competitiveness of a
country.
IV.
Infrastructure
1.
A well-developed infrastructure including efficient business systems
supports economic activity.
2.
A well-developed infrastructure also includes performing information
technology and efficient protection of the environment.
3.
Competitive advantage can be built on efficient and innovative
application of existing technologies.
4.
Investment in basic research and innovative activity creating
new knowledge is crucial for a country in a more mature stage
of economic development.
5.
Long-term investment in R&D is likely to increase the competitiveness
of enterprises.
6.
The quality of life is part of the attractiveness of a country.
From
IMD World Competitiveness Yearbook 2003, Stephane Garelli,
2003, IMD.
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Martin
Pring's Nineteen Trading Rules for Greater Profits.
1.
When in doubt, stay out.
2.
Never trade or invest based on hope.
3.
Act on your own judgment or else absolutely and entirely on the
judgment of another.
4.
Buy low (into weakness), sell high (into strength).
5.
Don't overtrade.
6.
After a successful and profitable campaign, take a trading vacation.
7.
Take a periodic mental inventory to see how you are doing.
8.
Constantly analyze your mistakes.
9.
Don't jump the gun.
10.
Don't try to call every market turn.
11.
Never enter into a position without first establishing a risk
reward.
12.
Cut losses, let profits run.
13.
Place numerous small bets on low-risk ideas.
14.
Look down, not up.
15.
Never trade or invest more than you can reasonably afford to lose.
16.
Don't fight the trend.
17.
Wherever possible, trade liquid markets.
18.
Never meet a margin call.
19.
If you are going to place a stop, put it at a logical, not convenient,
place.
20.
Follow the other nineteen rules without question.
From
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Martin
Pring's Attributes of Great Traders and Investors.
1.
Every successful market operator is interested in the markets
and how they work, not because they promise instant or even distant
wealth but because of the fascinating inner workings and the challenges
they offer.
2.
All successful traders and investors are loners because they are
constantly called on to take positions opposite to those held
by the majority or by the consensus view of the market. They also
need to be creative and imaginative independent thinkers.
3.
All great investors and traders utilize a philosophy or methodology.
It does not matter which approach an investor takes as long as
it works and the individual practitioner feels at home with it.
He has to be utterly dedicated to his chosen craft, for only then
can he truly excel.
4.
To achieve success in the markets, investors must be disciplined
and patient. Discipline means constantly gathering new facts and
sticking to your rules.
5.
All great market operators are realists. They are quick to recognize
when conditions change and the original reason for holding the
position no longer exists. They are married to nothing and are
not afraid to admit a mistake, however painful it may be at the
time.
6.
All successful market operators have the ability to think ahead
and figure out what may lie ahead. They are constantly looking
ahead to anticipate what could cause the prevailing trend to reverse.
They have trained themselves to question the status quo constantly
and to anticipate a possible change of course. By trying to maintain
a flexible outlook, the successful market operator is far less
susceptible to the element of surprise.
From
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Warren
Buffet's Six Qualities for Investment Success.
1.
You must be animated by controlled greed and fascinated by the
investment process.
2.
You must have patience.
3.
Think independently.
4.
You must have the security and self-confidence that comes from
knowledge, without being rash or headstrong.
5.
Accept it when you don't know something.
6.
Be flexible as to the types of businesses you buy, but never pay
more than they are worth.
From
The Money Master, John Train, 1980, Harper & Row,
extracted from Investment Psychology Explained, Martin
J. Pring, 1993, John Wiley & Sons.
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Warren
Buffet's Eleven Characteristics of a Healthy Business.
1.
Offers a good return on capital.
2.
Sees its profits in cash.
3.
Is understandable.
4.
Has a strong franchise and thus freedom to price.
5.
Doesn't require a genius to run it.
6.
Delivers predictable earnings.
7.
Should not be a natural target for regulation.
8.
Should have low inventories and a high turnover of assets.
9.
Should have owner-oriented management.
10.
Offers a high rate of return on the total of inventories plus
physical plant.
11.
Is a royalty on the growth of others and requires little capital
itself.
From
The Money Master, John Train, 1980, Harper & Row,
extracted from Investment Psychology Explained, Martin
J. Pring, 1993, John Wiley & Sons.
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John
Templeton discussed successful investing as being objective, flexible,
and consistent. He practiced eleven winning strategies.
1.
Buy a stock only as a share in a good business that you know a
lot about.
2.
Buy when stocks have few friends - particularly the stock in question.
3.
Be patient. Don't be rattled by fluctuations.
4.
Invest, don't guess.
5.
High yields are often a trap. Growing companies need all the cash
flow and paying out a high proportion of dividends robs them of
those growth opportunities.
6.
Buy only what is cheap right now or is almost sure to grow so
fast that it very soon will be cheap at today's price.
7.
If stocks in general are expensive, stand aside.
8.
Keep an eye on what the smart money masters are doing.
9.
Buy investment management if you find company analysis too difficult.
10.
Pick an appropriate investment strategy and stick with it.
11.
Be flexible.
From
The Money Master, John Train, 1980, Harper & Row,
extracted from Investment Psychology Explained, Martin
J. Pring, 1993, John Wiley & Sons.
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Ed
Seykota's Trading Rules.
1.
Cut losses.
2.
Ride winners.
3.
Keep bets small.
4.
Follow the rules without question.
5.
Know when to break the rules.
From
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Paul
Tudor Jones' Trading Rules.
1.
Don't ever average losses. Decrease your trading volume when you
are doing poorly; increase your volume when you are trading well.
Never trade in situations where you don't have control.
2.
If you have a losing position that is making you uncomfortable,
get out, because you can always get back in.
3.
Don't be too concerned about where you got into a position. The
only relevant question is whether you are bullish or bearish on
the position that day.
4.
The most important rule of trading is to play great defense, not
great offense. Everyday I assume the position I have is wrong.
If they are going against me, then I have a game plan for getting
out.
5.
Don't be a hero. Don't have an ego. Always question yourself and
your ability. Don't ever feel you are very good. The second you
do, you are dead.
From
Market Wizards: Interviews with Top Traders, Jack D.
Schwager, 1989, New York Institute of Finance, extracted from
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Bernard
Baruch's Ten Rules.
1.
Don't speculate unless you can make it a full-time job.
2.
Beware of barbers, beauticians, waiters, of anyone, bringing gifts
of 'insider' information or 'tips.'
3.
Before you buy a security, find out everything you can about the
company, its management and competitors, its earnings and possibilities
for growth.
4.
Don't try to buy at the bottom and sell at the top. This can't
be done - except by liars.
5.
Learn how to take your losses quickly and cleanly. Don't expect
to be right all the time. If you have made a mistake, cut your
losses as quickly as possible.
6.
Don't buy too many different securities. Better have only a few
investments which can be watched.
7.
Make a periodic reappraisal of all your investments to see whether
changing developments have altered their prospects.
8.
Study your tax position to know when you can sell to greatest
advantage.
9.
Always keep a good part of your capital in a cash reserve.
10.
Don't try to be a jack of all investments. Stick to the field
you know best.
From
Baruch: My Own Story, Bernard M. Baruch, 1957, Holt,
Rinehart and Winston, extracted from Investment Psychology
Explained, Martin J. Pring, 1993, John Wiley & Sons.
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Robert
Meier's Eleven Rules.
1.
Ask yourself what you really want. Many traders lose money because
subconsciously their goal is entertainment, not profits.
2.
Assume personal trade responsibility for all actions. A defining
trait of top performing traders is their willingness to assume
personal responsibility for all trading decisions.
3.
Keep it simple and consistent. Most speculators follow too many
indicators and listen to so many different opinions that they
are overwhelmed into action. Few people realize that many of the
greatest traders of all time never rely on more than two or three
core indicators and never listen to the opinions of others.
4.
Have realistic expectations. When expectations are too high, it
results in overtrading underfinanced positions, and very high
levels of greed and fear - making objective decision-making impossible.
5.
Learn to wait. Most of the time for most speculators, it is best
to be out of the markets, unless you are in an option selling
(writing) program. Generally, the part-time speculator will only
encounter six to ten clear-cut major opportunities a year. These
are the type of trades that savvy professionals train themselves
to wait for.
6.
Clearly understand the risk / reward ratio. The consensus is that
trades with a one to three or one to four risk / reward ration
are sufficient.
7.
Always check the big picture. Before making any trade, check it
against weekly and monthly as well as daily range charts. Frequently,
this extra step will identify major longer-term zones of support
and resistance that are not apparent on daily charts and that
substantially change the perceived risk / reward ratio. Point
& figure charts are particularly valuable in identifying breakouts
from big congestion / accumulation formations.
8.
Always under-trade. It is easy to forget just how powerful the
leverage is in futures and options. It is not uncommon to find
speculators holding positions two or three times larger than is
justified by their account size. By consciously under-trading,
that is taking positions much smaller than you might be able to,
you will gradually learn to hold back until you find the real
money-making opportunities and stay with major trends.
9.
Define your broker relationship. A full-service commodity broker
can be a valuable ally, but should not be pushed into the position
of making your final decisions.
10.
Never trade with serious personal problems. Ignoring this rule
is a prescription for disaster. The clarity of thought and emotional
control required even for part-time speculator is so great that
it is impossible to handle along with serious personal problems.
Likewise, trading should not be attempted during periods of ill
health, even including a bad head cold.
11.
Ignore the news media. The true goals of the national news media
are to shock, agitate, entertain, and editorialize a socialist
agenda - not provide useful information. Many of the finest traders
avoid all contact with public news, knowing how profoundly it
can undermine a trading plan. The more important trading profits
are to you, the less you can afford to follow the "news."
From
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Peter
Wyckoff Thirty-two Rules.
1.
Speculation demands cool judgment, self-reliance, courage, pliability
and prudence.
2.
A person's planning buying policy should always dovetail closely
with a predetermined selling policy.
3.
When in doubt about what to do in the market, do nothing. Nothing
can destroy the cool temperament of a man like unsystematic speculation.
4.
Look after the losses and the profits will take care of themselves.
5.
If you wait too long to buy, until every uncertainty is removed
and every doubt is lifted at the bottom of a market cycle, you
may keep on waiting ... and waiting.
6.
The worst losses in the market come from uninformed people buying
greatly overvalued stocks.
7.
Whenever hope becomes a chief factor in determining a market position,
sell out promptly.
8.
Never buy or sell merely on the basis of background statistics.
Technical market considerations and psychology must also be taken
into account.
9.
Don't believe everything a corporate official says about his company's
stock.
10.
Check over all the facts carefully yourself and view them conjunctively
with other known market factors.
11.
Never speculate with the money you need to live. If you can't
afford a possible loss, stay out of the market.
12.
One way to win in the market is to avoid doing what most others
are doing.
13.
When opinions in Wall Street are too unanimous - BEWARE! The market
is famous for doing the unexpected.
14.
Never cancel a Stop, or lower it, as the stock nears a trading
point in a fast sliding market.
15.
Try to analyze your weak points and convert them into strong ones.
16.
Forget the idea that speculation depends entirely upon luck, and
guard against blind faith in the suggestions of other men.
17.
Eliminate trust in any system you do not understand, but still
believe in the basic idea of the system.
18.
You should consult other market aids besides charts.
19.
Never be sentimental about a stock.
20.
Before investing in a stock, look into its history.
21.
You should be impervious to external forces and have no preconceived
opinions to be a successful tape reader. Only the price changes
appearing on the tape with attendant trading volume will tell
you what to do and when to do it.
22.
Always try to look and plan ahead, rather than considering just
the last sales bobbing in front of you. The printed prices you
see may have already largely discounted the news as it generally
is known.
23.
Tape reading is no exact science. You cannot form any definite
rules, because all markets differ. Therefore, you must work out
your own operational methods.
24.
Be pliable at all times, but don't overtrade. Plan each campaign
carefully, and never blame the tape for any error you may make.
25.
You should be able to differentiate between what has been, what
is now and what the future will be in planning a trading program.
26.
Before taking a position, determine exactly where the stock you
are watching, or the general market, stands. A study of price,
breadth, activity, time and volume will be helpful in this respect.
27.
Whatever is hard to do in the market is generaly the right thing;
and whatever is easy is usually the wrong thing to do.
28.
Take an occasional mental inventory to find out exactly where
you stand.
29.
Do not press yourself! "Speculitis" is malignant!
30.
When buying a stock, you should consider how far down it might
carry in the event your judgment about it is wrong.
31.
Try to avoid holding postmortem examinations of the "might
have beens" in the market.
32.
Buy the stocks of companies that have shown gradually increasing
earnings in industries making articles that people cannot do well
without.
From The Psychology of Stock Market Timing, Peter
Wyckoff, 1968, Prentice-Hall, extracted from Investment Psychology
Explained, Martin J. Pring, 1993, John Wiley & Sons.
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W.D.
Gann's Twenty-eight Rules.
1.
Amount of capital to use: Divide your capital into 10 equal parts
and never risk more than one-tenth of your capital on any one
trade.
2.
Use stop loss orders to protect trades.
3.
Never overtrade. This would be violating your capital rules.
4.
Never let a profit run into a loss. Raise your stop loss order
level after price increases.
5.
Do not buck the trend. Never buy or sell if you are not sure of
the trend according to your charts and rules.
6.
When in doubt, get out, and don't get in when in doubt.
7.
Trade only in active markets. Keep out of slow, dead ones.
8.
Equal distribution of risk. Trade in 2 or 3 different commodities,
if possible. Avoid tying up all your capital in any one commodity.
9.
Never limit your orders or fix a buying or selling price. Trade
at the market.
10.
Don't close your trades without a good reason. Follow up with
a stop loss order to protect your profits.
11.
Accumulate a surplus. After you have made a series of successful
trades, put some money into a surplus account to be used only
in emergency or in times of panic.
12.
Never buy or sell just to get a scalping profit.
13.
Never average a loss. This is one of the worst mistakes a trader
can make.
14.
Never get out of the market just because you have lost patience
or get into the market because you are anxious from waiting.
15.
Avoid taking small profits and big losses.
16.
Never cancel a stop loss order after you have placed it at the
time you make a trade.
17.
Avoid getting in and out of the market too often.
18.
Be just as willing to sell short as you are to buy. Let your object
be to keep with the trend and make money.
19.
Never buy just because the price of a commodity is low or sell
short just because the price is high.
20.
Be careful about pyramiding at the wrong time.
21.
Select the commodities that show strong uptrend to pyramid on
the buying side and the ones that show definite downtrend to sell
short.
22.
Never hedge. If you are long of one commodity and it starts to
go down, do not sell another commodity short to hedge it. Get
out of the market; take your loss and wait for another opportunity.
23.
Never change your position in the market without a good reason.
When you make a trade, let it be for some good reason or according
to some definite rule; then do not get out without a definite
indication of a change in trend.
24.
Avoid increasing your trading after a long period of success or
a period of profitable trades.
25.
Don't guess when the market is top. Let the market prove it is
top. Don't guess when the market is bottom. Let the market prove
it is bottom. By following definite rules, you can do this.
26.
Do not follow another man's advice unless you know that he knows
more than you do.
27.
Reduce trading after first loss; never increase.
28.
Avoid getting in wrong and out wrong; getting in right and out
wrong; this is making double mistakes.
From
How to Make Profits Trading in Commodities, W.D. Gann,
1976, Lambert-Gann Publishing, extracted from Investment Psychology
Explained, Martin J. Pring, 1993, John Wiley & Sons.
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Frank
Williams' Rules.
1.
Pay all bills before speculating.
2.
Don't speculate with another person's money.
3.
Don't neglect your business to speculate.
4.
If the market makes you irritable or interferes with sleep, you
are wrong.
5.
Don't use in the market money that you need for other purposes.
6.
Don't go "joint account" with a friend - play a lone
hand.
7.
Don't give a broker "discretionary power." If you can't
run your own account, leave the market alone.
8.
The broker who demands a large margin is your friend. Only a bucket-shop
wants you to trade on a slender margin.
9.
Don't buy more stock than you can safely carry. Over-trading means
forced selling and losses.
10.
Get accurate information. Demand facts, not opinions.
11.
Don't take advice from uninformed people - they know no more than
you about the market.
12.
Such advice as "I think well of it" or "It is a
cinch" means nothing.
13.
Use only a part of your capital in speculation.
14.
Don't buy "cats and dogs" (unseasoned stocks).
15.
Buy good standard stocks that have stood the test of time.
16.
Remember that good stocks always come back - unknown stocks may
disappear.
17.
Don't buy in a hurry - there is plenty of time to buy good stocks.
18.
Investigate each stock thoroughly before you buy.
19.
Remember that it is easier to buy than to sell. The salability
of a stock is very important.
20.
The market moves up slowly, but goes down fast.
21.
Be prepared to buy your stock outright if necessary. If you can't
do this, you are taking chances.
22.
Buy in a selling market - when nobody wants stock.
23.
Sell in a buying market - when everybody wants stock.
24.
The market is most dangerous when it looks best; it is most inviting
when it looks worst.
25.
Don't get too active. Many trades many losses.
26.
Long-pull trades are most profitable.
27.
Don't try to outguess the market.
28.
Look out for the buying fever; it is a dangerous disease.
29.
Don't try to pick the top and the bottom of the market.
30.
Don't dream in the stock market; have some idea just how far your
stock can go.
31.
Remember that the majority of traders are always buying at the
top and selling at the bottom.
32.
Don't worry over profits you might have made.
33.
Don't spend your paper profits - they might turn into losses.
34.
Watch the news. Remember that the market actually is a barometer
of business and credit.
35.
Don't buy fads or novelties - be sure the company you are becoming
a partner in makes something that everybody wants.
36.
Don't finance new inventions unless you are wealthy.
37.
Ask who manages the company whose stock you want to buy.
38.
Don't follow pool operations. The pools are out to get you.
39.
Don't listen to or give tips. Good tips are scarce and they take
a long time to materialize.
40.
Don't take flyers.
41.
Don't treat your losses lightly; they are serious. You are losing
actual currency.
42.
When you win, don't get reckless; put your winnings in the bank
for a while.
43.
Don't talk about the market - you will attract too much idle gossip.
44.
Sniff at inside information; it is usually bunk. The big people
don't talk about their operations.
45.
Don't speculate unless you have plenty of time to think about
it.
46.
Fortunes are not easily made in Wall Street. Some professionals
give their lives to the market and die poor.
47.
There is such a thing as luck, but it does not hold all the time.
48.
Don't pyramid.
49.
Don't average unless you are sure you know your stock.
50.
Don't buy more stock than you can afford, just to look big. If
you a ten-share man, don't be ashamed of it.
51.
Beware of a stock that is given an abundance of publicity.
52.
Use your mistakes as object lessons - the person who makes the
same mistake twice deserves no sympathy.
53.
Don't open an account at the broker's just to oblige a friend.
Charity and speculation don't mix.
54.
Remember that many people believe they can find better use for
your money than you can yourself.
55.
Leave short selling to experienced professionals.
56.
If you must sell short, pick a widely held stock or you may get
caught in a corner.
57.
Money made easily in the market is never valued - easy come, easy
go.
58.
Don't blame the Stock Exchange for your own mistakes.
59.
Don't shape your financial policy on what your barber advises
- hundreds of experts are waiting to give you exact information.
60.
Don't let emotion or prejudice warp your judgment. Base your operations
on facts.
From
If You Must Speculate Learn the Rules, Frank J. Williams,
1981, Fraser Publishing Company, extracted from Investment
Psychology Explained, Martin J. Pring, 1993, John Wiley &
Sons.
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H.J.
Wolf's Ten Rules.
1.
Do not overtrade.
2.
Limit losses. Place stops at technical danger points on all trades,
and if the location of the danger point is uncertain use a 2-point
or 2-point stop, or await a better opportunity.
3.
Follow the trend. Do not buck the trend, and do not hedge. Be
either long or short, but not both at the same time.
4.
Favor active issues. Do not tie up funds in obscure or inactive
stocks, and avoid thin-market issues except in long-pull operations.
5.
Buy during weaknesses. Buy only after reactions confirming higher
support.
6.
Sell during strength. Close out on unusual advances at first sign
of hesitation; and sell short only after evidence of distribution
with lower support followed by lower top.
7.
Distribute risk. Do not concentrate in one issue, but trade in
equal lots of several different issues, aloof which are definitely
attractive. Avoid spreading over too many different issues.
8.
Protect profits. Never let a 3-point profit run into a loss, and
never accept a reaction of over 5 points unless the favorable
trend of the stock has been definitely established.
9.
Avoid uncertainty. When the trend is in doubt, stay out. Avoid
a trader's market when the ultimate trend is uncertain unless
the trade can be protected by a small stop and justifies the risk.
10.
Discount fundamental outlook. Never ignore fundamental conditions,
and always favor the trade wherein fundamental and technical conditions
cooperate. Avoid a trade wherein fundamental and technical conditions
are opposed, except in cases of imminent liquidation, or overextended
short interest.
From
Studies in Stock Speculation, Volume II, H.J. Wolf, 1985,
Fraser Publishing Company, extracted from Investment Psychology
Explained, Martin J. Pring, 1993, John Wiley & Sons.
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Thomas
Hoyne's Eight Rules.
1.
Speculation is an art. The first principle of every art is to
have at the outset a clear conception of the end aimed at.
2.
The second great general rule for successful speculation is, never
enter upon any speculation without clearly conceiving precisely
the amount of profit that is sought and exactly the amount of
loss that will be submitted to in the effort to secure that profit.
3.
Every speculator must think for himself.
4.
A person must at all times strive to maintain the correct point
of view towards the market in which he is trading. This contemplates
the effect of the market on himself and other speculators; and
their effect upon it.
5.
A speculator should first determine never to do anything at all
with a haste that precludes forethought.
6.
As the first aim of every speculator should be to hold himself
free from all crowd influence, he should not, because of greed,
at the very outset make his speculation so large in proportion
to his available capital that a comparatively small fluctuation
against him puts him into a group of speculators psychologically
on the verge of fear and on the point of being swept into crowd
action.
7.
Never should you accept as authoritative any explanation from
other person for a past action of the market. Think out that action
for yourself.
8.
A speculator must think for himself, and must do his thinking
rigidly in accordance with the method of reasoning he has laid
down.
From
Speculation: Its Sound Principles and Rules for Its Practice,
Thomas Hoyne, 1988, Fraser Publishing Company, extracted from
Investment Psychology Explained, Martin J. Pring, 1993,
John Wiley & Sons.
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Victor
Sperandeo's Nineteen Rules.
1.
Trade with a plan and stick to it.
2.
Trade with the trend. "The trend is your friend!"
3.
Use stop loss orders whenever practical.
4.
When in doubt, get out!
5.
Be patient. Never overtrade.
6.
Let your profits run; cut your losses short.
7.
Never let a profit run into a loss. (Or always take a free position
if you can.)
8.
Buy weakness and sell strength. Be just as willing to sell as
you are to buy.
9.
Be an investor in the early stages of bull markets. Be a speculator
in the latter stages of bull markets and in bear markets.
10.
Never average a loss - don't add to a losing position.
11.
Never buy just because the price is low. Never sell just because
the price is high.
12.
Trade only in liquid markets.
13.
Never initiate a position in a fast market.
14.
Don't trade on the basis of "tips." In other words,
"trade with the trend, not your friend." Also, no matter
how strongly you feel about a stock or other market, don't offer
unsolicited tips or advice.
15.
Always analyze your mistakes.
16.
Beware of "Takeunders."
17.
Never trade if your success depends on a good execution.
18.
Always keep your own records of trades.
19.
Know and follow the Rules!
From
Trader Vic - Methods of a Wall Street Master, Victor
Sperandeo with Sullivan Brown, 1991, John Wiley & Sons, extracted
from Investment Psychology Explained, Martin J. Pring,
1993, John Wiley & Sons.
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Disclaimer:
As
a disclaimer, the information provided in this website is based
on my own views and opinions only and they should not be treated
as definitive state of the world. More importantly, visitors
to this site should remain solely responsible for their own investment
decisions.
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