Posted by: jhamon | August 1, 2009

10-Point Stock Trading Manifesto

  1. Buy And Hold Is Dead.FractalBoxAdvisorsLogoArt_AD1 
  2. Value Investing Has Been Discredited: Bill Miller lost 58% in 2008 after beating S&P for 15 years!
  3. You Can’t Just “Buy the Market”: U.S. demographics don’t support the return of a secular bull market à la 1982-2000. 
  4. Leverage Is A Four Letter Word.  Leverage can increase volatility excessively; with a meaningful edge it is not necessary.
  5. Focus On Absolute Returns: There is no comfort in having “only lost 30%” when the market is down 45%.  Generate returns in all cycles.
  6. Trade Long And Short: Engineer strategies to profit from both bull and bear markets
  7. Stock Selection Is Key: Build your book from those names that will outperform or underperform the market.  Ignore the rest.
  8. Work Without Bias: You are the weakest link in the chain.  Take a systematic approach.
  9. Manage Risk: You must have a method to measure and control risk.  Otherwise it’s only a matter of time before you blow up.
  10. Never Confuse Luck With Skill.  Trading is a problem of uncertainties, not of probabilities.  Plan and operate accordingly.

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©2009, FractalBox Advisors LLC



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  5. Great article, The concept of value investing has encouraged me to start a portal of value investing on the Indian stock markets. I am doing analysis of Low PE, High dividend yields, Low PB and Low PB with high returns. I would love to share anything which is common. I really appreciate the effort you have put in your blog.

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