Reblog: 37 Amazing Lessons I Learned About Investing From Jim Cramer


Every day I jot down on yellow legal paper a list of ideas and subjects that I think will be interesting to our subscribers and that I can add value to — topics for future opening missives in my Diary. 

Each morning, at around 4:45, I think about what I will write as the subject of my opener for the day.

I typically contemplate the prior day’s market action and the overnight price changes in the major asset classes and regional markets around the world and I try to come up with something relevant, topical and actionable.

Something on my list, for many moons, is the subject of the lessons I have learned from Jim “El Capitan” Cramer.

Over the years I have written about the contributions that Jim has made and I have defended Jim as well against the wrong-footed criticism that he often faces in his role as a high-profile and visible public figure.

My defence of Jim is not done because I essentially have worked for him over the last two decades. Rather, it is heartfelt and done in the recognition of the contributions that Jim has made since he invented and founded TheStreet. I do this in large part because Jim has been my professor, an important contributor to my investment experience.

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Reblog: Candlestick patterns – 21 easy patterns (and what they mean) Part 3 of 3


In the first part of the post, we looked at Equal open and close, Doji patterns and in the second part, we looked at Short body candles. In today’s post, we will discuss Long body candlestick patterns.

Long body candlestick patterns

candlestick patterns dark cloud cover

Dark Cloud Cover:

Dark cloud cover candlestick patterns indicate an incoming bearish reversal.

A two candle pattern, the first candle is a long green bullish candle.

The next candle opens higher but reverses and declines, the candle then closes below the center of the first candle.

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Reblog: Candlestick patterns – 21 easy patterns (and what they mean) Part 2 of 3


In the first part of the post, we looked at Equal open and close, Doji patterns. In today’s post, we will discuss Short body candles.

Short body candles.

candlestick patterns long shadow days

Long Shadow candles:

Long shadows are one of the more reliable candlestick patterns.

Candles with a long top shadow and short lower shadow show us that buyers dominate the market, these can lead to or continue a bull run in prices.

On the other end.

Candles with a long lower shadow and short upper shadow show us that sellers dominate the market and these candles can lead to or continue a bear run in prices.

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Reblog: Candlestick patterns – 21 easy patterns (and what they mean) Part 1 of 3


Here’s the deal, learning just a few key candlestick patterns WILL improve your ability to recognize trading opportunities and enter better trades! The Japanese have been using these patterns for centuries, to trade rice of all things! So, there is a rich history to the art of candlestick trading. Candlestick patterns are an integral part of technical analysis, candlestick patterns emerge because human actions and reactions are patterned and constantly replicate and are captured in the formation of the candles. So, by recognising these patterns and applying the lessons that the patterns teach, can and does yield results in your trading!

And isn’t that the aim of trading?

Now I know what your thinking!

BUT!

Don’t think of this as a list to memorize.

Think of this as a guide that you jump in and out of, whenever you need to jog your memory!

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Reblog: Seth Klarman: Investing Requires A Degree Of Arrogance Tempered With The Humility Of Knowing We Could Be Wrong


Several years ago Jason Zweig did a great interview with Seth Klarman titled – Opportunities for Patient Investors, which was published by the CFA Institute. While the entire interview provides a number of value investing insights, one answer, in particular, provides a unique insight into Klarman’s psychology towards investing saying:

“In investing, whenever you act, you are effectively saying, I know more than the market. I am going to buy when everybody else is selling. I am going to sell when everybody else is buying. That is arrogant, and we always need to temper it with the humility of knowing we could be wrong—that things can change—and acknowledging that we have a lot of smart competitors.”

Here is an excerpt from that interview:

Zweig: In a Forbes article in the summer of 1932, Benjamin Graham wrote, “Those with enterprise haven’t the money, and those with money haven’t the enterprise, to buy stocks when they are cheap.” Could you talk a little bit about courage? You make it sound easy. You have great clients and great partners. Was it easy to step up and buy in the fourth quarter of 2008 and the first quarter of 2009?

Klarman: You may be sceptical of my answer, but, yes, it was easy. It is critical for an investor to understand that securities aren’t what most people think they are. They aren’t pieces of paper that trade, blips on a screen up and down, ticker tapes that you follow on CNBC.

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Reblog: What Investors Need to Know About Investing in Low PE Stocks


Man and woman in business attire happily looking at computer screen
Value investing starts with low PE stocks, but it shouldn’t be an investor’s only financial metric.

What do Warren Buffett, Ben Graham, Seth Klarman, and Peter Lynch all have in common? Besides being wildly successful investors, they’re all are adherents to value investing, a method where one attempts to buy securities that have a higher intrinsic value than their current price.

One of the most basic forms of value investing is to find stocks with low price-to-earnings (PE) ratios. The PE ratio is a simple ratio that divides the current price per share of a company by the earnings per share over the trailing-12-month period. The logic behind buying low PE stocks is simple: As an investor, you are ultimately entitled to a pro-rata portion of company earnings, so paying the lowest cost, or multiple, for those earnings is preferable than paying a higher multiple. Essentially, your dollar is buying a larger portion of company earnings than it would with a high-multiple stock.


Reblog: Ascending Triangle Chart Pattern (Trading Strategy)


Here’s the deal:

I’m not a chart pattern trader.

However…

The Ascending Triangle chart pattern is one of the few patterns I trade.

Why?

Because when other traders get stopped out, they help “push” the market further in your favor.

In short, you EXPLOIT the stop-loss orders of losing traders — and that’s why it works.

And because this is so powerful, I’ve created a new trading video on Ascending Triangle chart pattern.

You’ll learn:

  • What is an Ascending Triangle chart pattern and why does it work
  • You should always go short when the price is at Resistance, right? Wrong! I’ll explain why…
  • How to better time your entries & exits when trading the Ascending Triangle
  • When is the best time to trade Ascending Triangle (and why)
  • How to find high probability breakout trades with the Ascending Triangle chart pattern

You ready to learn this powerful chart pattern?

Then go watch this video below now…

Now, here’s a question for you…

How do you trade the Ascending Triangle chart pattern?

The original post by Rayner Teo appears on tradingwithrayner.com and is available here.


Reblog: The Four Fundamental Skills of All Investing


In his book Succeeding, John Reed wrote one of the smartest things I’ve ever read:

When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.

This extends beyond those learning a new field. I think it’s most relevant for those who consider themselves experts. The root of a lot of professional error is ignoring simple ideas that seem too basic for those with experience to pay attention to.

Having seen the investing world from several different angles, four skills stand out as governing most of outcomes.

1. The ability to distinguish “temporarily out of favor” from “wrong.”

The two strongest forces in investing are “This investment looks broken because that’s how opportunity presents itself” and “This investment looks broken because it’s actually broken.” It’s hard to tell the difference in real time. Distinguishing between the two relies on accurately calculating the odds that something will eventually come along to heal or promote the market or company that looks broken. And since those odds are always less than 100%, it can take a while to tell if you’re any good at it, because even when the odds are in your favor the outcome can go the wrong way. It’s hard to do. But worse, and more common, is forgetting that a distinction needs to be made in the first place.

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Reblog: Walter Schloss: What Kind Of Stocks Do We Look At For Investment


In 1993 Walter Schloss gave a great presentation called – Upper Level Seminar In Value Investing, at the Columbia Business School. Schloss’ notes for the presentation included a number of timeless investing lessons including the kinds of stocks he looks at for investment, how to scale into an investment, and how to manage a stock portfolio.

Here is an excerpt from the presentation:

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Reblog: Three Lessons for Investors in Turbulent Markets


The global stocks roller-coaster of recent days reminded me of three lessons I learned many years ago as an investor in emerging markets. If well understood and applied, these precepts can turn unsettling volatility surges into longer-term opportunities.

  1. Long periods of market calm create the technical conditions for violent air pockets. Until last week, the most distinctive feature of many market segments was historically low volatility, both implied and realized. Although several economic and corporate reasons were liberally cited for this development (including the convergence of inflation rates worldwide and eternally supportive central banks, as well as healthy balance sheets and synchronized growth), an important determinant was the conditioning of the investor base to believe that every dip had become a buying opportunity, a simple investment strategy that had proven very remunerative for the last few years.The more investors believed, the greater the willingness to “buy the dip.” Over time, the frequency, duration and severity of the dips diminished significantly. That reinforced the behavior further.The economist Hyman Minsky had a lot to say about the phenomenon of prolonged stability breeding complacency as a precursor to instability. This phenomenon is reinforced by the insights of behavioral finance and can lead markets to embrace paradigms that ultimately prove unsustainable and harmful (such as the idea well more than a decade ago that policy making had totally overcome the business cycle, and the notion that volatility had been flushed or hedged out of the financial system). Continue Reading