This page has been archived and commenting is disabled.

10 Legendary Investment Rules From Legendary Investors

Tyler Durden's picture




 

Submitted by Lance Roberts of STA Wealth Management,

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 12/11/2014 - 20:06 | 5542195 buzzsaw99
buzzsaw99's picture

none of that pertains to today's so called markets

Thu, 12/11/2014 - 20:16 | 5542220 kaiserhoff
kaiserhoff's picture

Agreed Buzz, but let's be specific about why.

Points 1 and 8 rely on portfolio theory which has worked well in the past.  Spreading investments around, as few as 30 stocks captures most of the benefit, because one big, early loss in a small portfolio creates a hole from which you never fully recover.  There are many studies of this, but the conclusions converge.  So what?

The S&P 500 has a more than sufficient base, except that all shares suffer overvaluation from ZIRP and world wide QE,

  so..., all that diversity is a chimera.  Looks good in theory, but only works when we have real price discovery.

Thu, 12/11/2014 - 20:26 | 5542236 AldousHuxley
AldousHuxley's picture

don't try to predict the future, make small amount of money on volume...

Thu, 12/11/2014 - 20:31 | 5542258 kaiserhoff
kaiserhoff's picture

I'm an arb, so I don't waste much time on predictions,

  but ZIRP has even screwed up option values.

  As buzz says, nothing is cheap.

Thu, 12/11/2014 - 20:36 | 5542276 cpnscarlet
cpnscarlet's picture

No matter how much that b***h has beaten up on me, it's still hard to believe that silver isn't cheap right now.

Fri, 12/12/2014 - 06:35 | 5543423 StandardDeviant
StandardDeviant's picture

Kaiserhoff, please explain what you mean about ZIRP and option values.  Are you talking about the mathematics -- that an interest-rate term of ~0 messes up Black-Scholes and other pricing models?  Or something else entirely?

Thu, 12/11/2014 - 20:14 | 5542210 buzzsaw99
buzzsaw99's picture

there are no investors, only speculators

nothing is cheap, everything is expensive, but it will go higher for certain, so btath

risk is an antiquated notion abolished by the central banks

Thu, 12/11/2014 - 20:27 | 5542238 gatorengineer
gatorengineer's picture

Go all the way out.... there are no investors, only gamblers picking up nickels and dimes in front of the steam roller.

Thu, 12/11/2014 - 20:28 | 5542248 kaiserhoff
kaiserhoff's picture

Nothing but risk on Main Street,

  on Wall Stret, nada.

Thu, 12/11/2014 - 20:38 | 5542287 silentboom
silentboom's picture

Gold mining stocks are cheap.

Thu, 12/11/2014 - 22:10 | 5542565 malek
malek's picture

Risk has not and can never be abolished by the central banks, it has only been spread onto everyone's shoulders (except the 0.1%), without their consent.

Thu, 12/11/2014 - 20:34 | 5542270 Yen Cross
Yen Cross's picture

  Without reading, I'd say they would encourage due dilligence and the ability to adapt are important qualities. Even more important is being able to see with limited risk, where you can identify counter trends before they happen. This enables you to build a position when it's cheap.

Thu, 12/11/2014 - 20:36 | 5542281 buzzsaw99
buzzsaw99's picture

we will grow old and die before anything is cheap ever again

Thu, 12/11/2014 - 20:49 | 5542321 kaiserhoff
kaiserhoff's picture

You'd never believe how much it costs to look this cheap.

                          Dolly Parton

Thu, 12/11/2014 - 20:52 | 5542328 Yen Cross
Yen Cross's picture

     Can you imagine what WWII era citizens must think when they walk into any retail establishment, other than the $Store Buzz?

    Things would have much more value, including "basic human values" if input was valued and protected. The Chinese and Emerging markets are finally figuring that out. That's why the PBOC is fighting the trading band. (It won't work)

Thu, 12/11/2014 - 20:50 | 5542322 Thirtyseven
Thirtyseven's picture

How does everyone feel about housing right now?

Thu, 12/11/2014 - 21:15 | 5542386 Karlus
Karlus's picture

As in Miami real estate?

Thu, 12/11/2014 - 21:06 | 5542363 AdvancingTime
AdvancingTime's picture

The one thing I have learned is that predicting the future is an impossible task, a fools errand, full of pitfalls. Still we listen and soak in all that is said, we even spend a tremendous amount of money to gain an edge in knowing what maybe just around the corner.

If you step back ten years in your mind, I suspect that things have not unfolded as you might have predicted. When you see how the world has developed, the twist and turns are most unpredictable. Nowhere is this more apparent then in the economy, whether it is in the areas of interest rates and inflation or the rise and fall of companies. Surprise and awe, highlighted with bouts of shock is what we should expect going forward. More on the subject of predictions in the article below.

http://brucewilds.blogspot.com/2013/06/predicting-future-and-hindsight-mirrors.html

Thu, 12/11/2014 - 21:18 | 5542398 Yen Cross
Yen Cross's picture

 Let me share some truth, my friend. One of mans greatest weaknesses is mortality.

 Not general "life span" per se. It's the ability to transend memory and values from one generation to the next.

 It's seem so long ago 2007-'08 to the "25 year old" riding the wave of endless easy money, on his/her way to financial independence.

  Advice can be offered, but they feel prodigal, unwavering, in their resolution. ;-)

 

Thu, 12/11/2014 - 21:08 | 5542372 One And Only
One And Only's picture
Rule #1. rehypothecate your bonds nigga.
Thu, 12/11/2014 - 22:30 | 5542603 armageddon addahere
armageddon addahere's picture

The game of speculation must be intolerably boring and exacting to anyone who is not a gambler. While those who have that propensity, must pay the inevitable toll.

                                   - Maynard Keynes

 

I have a simple system that never fails. I never buy at the bottom, and I always sell too soon. I find as long as I follow these rules, I can't help but make money.

                                    - Nathan Rothschild

 

Is this the real life? Is it just fantasy? Caught in a landslide, no escape from reality.

                                   - Freddy Mercury

Fri, 12/12/2014 - 00:49 | 5543065 Wild Theories
Wild Theories's picture

like the N. Rothschild quote

Fri, 12/12/2014 - 06:38 | 5543425 StandardDeviant
StandardDeviant's picture

I assume he said that before the whole Bumi thing went south.

Fri, 12/12/2014 - 08:56 | 5543600 Wild Theories
Wild Theories's picture

Haha, their gene pool have degraded a bit since their founding generations

I'm sure it's the long dead 18th century Nathan Rothschild and not one of their modern progeny we are quoting here, but I guess you probably knew that :)

Fri, 12/12/2014 - 16:05 | 5545672 armageddon addahere
armageddon addahere's picture

Mayer Nathan Rothchild 1777 - 1836

Thu, 12/11/2014 - 22:27 | 5542615 Hulk
Hulk's picture

Wonder if Leo read this...

Fri, 12/12/2014 - 08:35 | 5543589 matagorda
matagorda's picture

What advice do you give investors who've shorted JGB's all the way down?

Fri, 12/12/2014 - 09:35 | 5543806 Fun Facts
Fun Facts's picture

syndicate protocol #20

Replace sound investment with speculation.

Done.

Do NOT follow this link or you will be banned from the site!