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For here is the cold truth. Unless you have a wealthy relative, the only way you are ever going to lift yourself above the great unrich – absolutely the only hope you have – is to take a risk.
Calling it an investment doesn’t change the facts: a gamble is still a gamble.
Always play for meaningful stakes.
Diversification has three major flaws: 1. It forces you to violate the precept of Minor Axiom I – that you should always play for meaningful stakes.
The Second Major Axiom: On Greed Always take your profit too soon.
Decide in advance what gain you want from a venture, and when you get it, get out
The inability to jump quickly off a sinking ship has probably cost more speculators more money than any other failing,
Gerald Loeb’s rule of thumb was that you should sell whenever a stock’s price has retreated 10 to 15 percent from the highest price at which you have held it, regardless of whether you then have a gain or a loss.
Ideally we should welcome our small losses, since they protect us from large losses.
The successful speculator bases no moves on what supposedly will happen but reacts instead to what does happen.
The truth is that the world of money is a world of patternless disorder, utter chaos.
It is true that history repeats itself sometimes, but most often it doesn’t, and in any case it never does so in a reliable enough way that you can prudently bet money on it.
If you play long enough, you will enjoy winning streaks – perhaps some memorable ones, with which you will undoubtedly bore your friends for the rest of your life. But there is no orderly way in which you can cash in on these streaks.
If you are interested in money – which is presumably why you are studying speculation – it is a mistake to let yourself get too attached to any physical thing in which your capital is invested.
Another common way to get rooted is to get into a situation in which you are waiting for something to pay off.
Before committing your money to a venture, ask how you will save yourself if things go wrong. Once you have that clearly worked out, you’ve got something better than optimism. You’ve got confidence.
long-range plans engender a belief that the future is under control. This is a hair-raisingly dangerous belief.
