![]() Investing is a game that is won by taking prudent risks and avoiding permanent ruin. “There are old investors, and there are bold investors, but there are no old bold investors.” Howard Marks has a quote that I think explains Jesse’s fatal flaw as a trader, and this may be his final lesson to us. Toward the end, Jesse broke his own risk management rules and paid a dear price-losing most of his fortune. The tragedy of Jesse Livermore’s story is how it ended. Tactical trading can help around the edges, but should be a secondary priority. Intelligent asset allocation should really be the primary strategy most people focus on. You don’t have to be a hero in order to achieve your financial objectives. Things like: supply and demand, fear and greed cycles, etc. Try to avoid getting so caught up in the complexity surrounding COVID-19 that you overlook simpler stuff that can also provide directional clues for your portfolio. Many of the challenges we face seem new and scary.Ĭapital markets are always changing, too.īut many of the forces driving capital markets today remain the same as they’ve always been. Thus, he would probably favor owning the FANGs in today’s market over something like the airlines.Ģ020 is an odd year any way you slice it. If Jesse were going to own any stocks while the bulls and bears battle it out, where would he focus?Īs a trend trader, he normally wanted to own the strongest stocks in a bull market, while avoiding or shorting the weakest stocks in a bear market. Violating that level would put bears firmly in control.įor now, the market is in a trading range.
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