Knowledge Is Power, So Knowledge Is Power, So Be As Powerful As You Be As Powerful As You

Can!Can!

Jesse LivermoreJesse LivermoreJesse Livermore (July 26, 1877 — November 28, 1940), also known as the Boy Plunger was an early 20th century stock trader. He was famed for making and losing several multi-million dollar fortunes and short selling during the stock market crashes in 1907 and 1929.

Livermore first became famous after the Panic of 1907, when he short sold the market as it crashed. He noticed conditions where a lack of capital existed to buy stock. Accordingly, he predicted that there would be a sharp drop in prices when many speculators were simultaneously forced to sell by margin calls and a lack of credit. With the lack of capital, there would be no buyers in sight to absorb the sold stock, further driving down prices. After the crash and its aftermath, he was worth $3 million.

How Did Jesse Livermore How Did Jesse Livermore Play The Game?Play The Game?“Wall Street never changes,” he said,

“because human beings never change.”Learn from your mistakes, Cut

losses/control emotions: A TRADER MUST LEARN AND PRACTICE EMOTIONAL CONTROL. Let the winners ride: Don’t dump a winning trade.

Beware of stock tips: Never take stock tips under any circumstances.

“I only lost money when I did not follow my own rules.” The book explains the importance of discipline in following the trading rules.

Livermore made two observations at his young age:1. The majority of traders and investors lost

money on a consistent basis.2. The majority of traders had no intelligent

and consistent plan to trade the market.In effect they were gambling. Playing tips.

Playing hunches. Playing the favorites of the moment. Playing all kinds of tips—tips from analysts, friends, insiders.

Don’t try and anticipate what the market will do next—simply go with the evidence of what the market is telling you—presenting to you.

Market is driven not by logic but by emotion, it is most often unpredictable and goes against logic

“There is more money to be made waiting than, by buying and selling!

To anticipate the market is to gamble; to be patient and react only when the market gives the signal is to speculate.

Classic mistake an investor makes “ in bull market they become blind to the risk and in bear market they become blind to opportunities”

When the market gives no clear signals to buy or sell short, many beginners start squinting at their screens, trying to recognize trading signals. A good signal jumps at you from the chart and grabs you by the face—you can’t miss it! It pays to wait for such signals instead of forcing trades when the market offers you none

That there is time to go long, time to go short, and time to go fishing.

Two criteria for trading liquidity & volatility, Liquidity refers to the average daily volume the higher the Volume, the easier it is to get in and out. Volatility the more it moves, the greater the trading opportunities.

Jesse Livermore QuotesJesse Livermore Quotes

Warren BuffetWarren BuffetWarren Edward Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the most successful investors in history, the primary shareholder and CEO of Berkshire Hathaway, and in 2008 was ranked by Forbes as the richest person in the world with an estimated net worth of approximately $62 billion.

Warren Buffett, one of the most successful investors in America, is fond of saying that when you buy a stock, you become a partner of a manic-depressive fellow he calls Mr. Market. Each day Mr. Market runs up and offers either to buy you out of business or to sell you his share. Most of the time you should ignore him because the man is psychotic,But occasionally Mr. Market becomes so terribly depressed that he offers you his share for a song—and that’s when you should buy. At other times he becomes so manic that he offers an insane price for your share—and that’s when you should sell.

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised

Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.

Only when the tide goes out do you discover who's been swimming naked.

Price is what you pay. Value is what you get. Wall Street is the only place that people ride to in a Rolls

Royce to get advice from those who take the subway. We simply attempt to be fearful when others are greedy

and to be greedy only when others are fearful. We enjoy the process far more than the proceeds.

Warren Buffet QuotesWarren Buffet Quotes

Peter LynchPeter LynchPeter Lynch, a highly successful money manager, writes that he only buys stocks in companies that are so simple that an idiot could run them—because eventually one will.

You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or, worse, to buy more of it, when the fundamentals are deteriorating.If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.