A One Stock Tale: "Just One Thing"

Posted by Carlos Sera on Aug 18, 2015 11:51:00 AM

This tale is not one that I’m particularly proud to tell. It teaches us the power of one extraordinary stock in a portfolio. For those that have seen the movie City Slickers and remember Curly famous line, “One Thing, Just One Thing” this tale is for you. In the movie Curly, played by Jack Palance, was explaining the secret to happiness. In this tale if there’s just one thing that you learn about individual stock investing it’s hold on to your winners.

Read More

Topics: Trading Tales

A Tale of Might: "Do As I Say, Not As I Do"

Posted by Carlos Sera on Aug 12, 2015 12:11:00 PM

Have you ever heard the expression, do as I say not as I do?  I’m sure we all have.  This expression typically roles off the tongue of someone that’s been there and done that.  Typically these words come form a person that has accumulated great wisdom having been around the block a time or two.  They are experts.  It’s not a bad idea to listen to these people and take their advice.  It’s important to understand their perspective before you do however.  The reason I believe is because there is much to learn from how they came to these conclusions or wisdom.  If you don’t know the why of the wisdom you quickly forget the advice.  Learn the why.

Read More

Topics: Trading Tales

A Tale of Identity: "Trader or Investor?"

Posted by Carlos Sera on Aug 12, 2015 12:07:00 PM

Are you an investor or a trader? The answer is I don’t know exactly where one begins and the other one ends. This question needs to be examined because it provides insight into why so many people would be far better off investing in a diversified portfolio of low cost passive investments such as low cost mutual funds and exchange traded funds that they rebalance periodically or systematically.

Read More

Topics: Trading Tales

A Sweet Tale: "The Sugar King"

Posted by Carlos Sera on Aug 12, 2015 12:03:00 PM

This tale is a variation of A Tale of Might.  I call it a sweet tale because the person involved in this tale made a fortune trading sugar.  He wasn’t a sugar trader in the traditional sense of someone that trades sugar on a commodities exchange.  However, he understood sugar because he was in the business of buying it every day.  I’ll call him the Sugar King because he was a Sugar King.  To give him any other name would diminish the importance of his investment philosophy and would dilute from this tale.

Read More

Topics: Trading Tales

A Positive Tale: "The Pigeon"

Posted by Carlos Sera on Aug 12, 2015 12:00:00 PM

One of my best friends likes to play poker. He’s pretty good at the game and has a poker saying that he uses to describe many of life’s situations. He likes to say “When you show up at a poker game and you don’t know who the pigeon is, you’re the pigeon.” There is great wisdom in this saying. He recognizes that at times he is the pigeon while other times he isn’t. I borrowed his saying because it serves to illustrate the concept of trading.

Trading is described as a zero sum game as is poker. For someone to win at poker it must come at the expense of another player in the game or in the case of trading, at the expense of another trader. In zero sum games the most talented participant typically prevails and the winnings come at the expense of the least talented. The least talented according to my friend is the pigeon.

Read More

Topics: Trading Tales

A Mining Tale: "Fool's Gold"

Posted by Carlos Sera on Aug 12, 2015 9:21:00 AM

This is A Trading Tale.  It deals with what is called Data Mining and thus the title.  The subtitle is “Fools Gold” and I use it to help you remember the tale’s lesson.  Fools Gold is the name given to a mineral which looks like gold but is actually worthless.  The earliest origin of the term I can uncover is attributed to a Martin Frobisher and his return to England from a voyage to find the North West Passage in 1576 with a cargo of this supposed ‘gold mineral’.  The term has come to denote any apparent treasure trove that turns out to be worthless.  450 years later we have our own version of fools gold—it’s called the financial markets.  Just like the unknowledgeable prospectors of old thought they had hit the mother-lode, so do many of today’s data prospectors or data miners.

Read More

Topics: Trading Tales

A Trader's Tale: "The Plight of the Trader"

Posted by Carlos Sera on Aug 12, 2015 9:18:00 AM

We learned in A One Stock Tale that you can always become a better trader. Anyone that invests or trades financial instruments that exhibit volatility quickly experiences what I call the plight of the investor or better said the plight of the trader. I call this a plight because as a trader it seems that you are always wrong or at a minimum in hindsight you could have done better. Objective self-critique is the greatest tool that a trader possesses.

Read More

Topics: Trading Tales

Comments