Moneymaking via the value investing method is no longer completely distinct from speculation, owning to the speed at which information is exchanged today. While the difference between fundamental analysis and chart reading is still as clear as ever, value investors can make money in their stocks via structured trading without sacrilege. These bets would thus make him a semi-investor i.e one who researches stocks on a fundamental basis, but makes money going on stocks as well as trading in them.

Fundamentals in stock trading according to Jesse Livermore.

  • Learning and knowledge are seldom sold at the same store.
  • Always treat speculation as a business, not as a gamble.
  • After forming a definite opinion of a stock do not get too anxious to get it. Watch it patiently and wait for it to get active i.e until it gets a new high.
  • Do not permit impatience to manoeuvre good judgement.
  • As long as the stock is acting right, and the market is right, do not be in a hurry to take a profit.
  • Profits always take care of themselves, losses never do.
  • Successful speculation is anything but a mere guess.
  • You must keep your own records. You must put down your own figures. Dont let anyone else do it for you. You will be surprised how many new ideas you will formulate by doing so.
  • Speculators in stock markets have lost money. But i believe it is a safe statement that the money lost by speculation alone is small compared to gigantic sums lost by so-called investors who have let their investments ride.
  • Never sell a stock because it seems high priced. You may watch it from 10 to 50 and decide that it is selling too high at a level. That is the time to determine what is to prevent it from starting at 50 and going to 150 under favourable earning conditions and good corporate governance. — Eicher Motors.
  • It is foolhardy to make a second trade, if your first trade shows a loss. Never average losses. Let that me indelibly written upon your mind.
  • Stocks, like individuals, have character and personality. Some are high-strung, nervous and jumpy; other are forthright, direct,logical. One comes to know and respect individual securities. Their action is usually predictable under varying set of conditions.
  • When i see a danger signal handed to me i don’t argue with it, i get out. If after a few days later if everything looks alright, i can always go back in.Thereby i have saved my self worry and money.
  • The human side of every person is the greatest enemy of the average investor or speculator.
  • No one can be successful by speculating every day or every week:that there are only a few times a year, possibly four or five, when you should allow yourself to make any commitment at all. In the interims you should let the market shape itself for the next big movement.
  • When you are doing nothing, those speculators who feel they must trade day in and day out are laying the foundation for your next venture.
  • After a period of success, one almost always becomes careless or overly ambitious.
  • Dont allow yourself to turn completely bearish or bullish on the whole market.
  • When you are handling surplus income, do not delegate the task to anyone.Faulty speculation is one of the most certain ways of loosing it.
  • Cash to the speculator is as merchandise on the shelves of the merchant.
  • The only money that is ever taken out of Wall Street by speculators, is the money they draw out of their accounts after closing a successful deal.
  • Money in the brokers account or the bank account is not the same as the cash that you can run your fingers over once in a while.
  • Never make any trade unless you know that you can do so with financial safety.
  • Just as market will give you time to get in – if you have the patience to wait – they will just as surely give you time to get out.” Rome was not built in a day.” No real movement of importance ends in one day or in one week. It takes time for it to run its logical course.
  • Too many speculators buy or sell impulsively by acquiring their entire line at almost the same price. That is not only wrong, but also dangerous. Each succeeding purchase must be made at a higher price than the precious one.That same rule should be applied in selling short. Never make an additional sale unless it is at a lower price than the previous sale.
  • Timing is essential………impatience costly.
  • Beware of inside information…. all inside information.
  • If there ever was easy money lying around, no one would be forcing it into your pocket.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s