Greatest Trader

Seventy one years ago, on Thursday, November 28, 1940, Jesse Lauriston Livermore, entered the Sherry Netherland Hotel where he took a seat near the bar and enjoyed a couple of old-fashioned. After an hour Jesse Livermore got up and went in the cloakroom, seated himself on a stool, and then shot himself in the head with a .32 Colt automatic. How could the man who is still regarded by many as the greatest trader who ever lived go out this way by taking his own life? It just doesn’t match the rest of his life.

In his youth Jesse was know as the “Boy Plunger” because he looked younger than his years and he would take big positions when he traded against the bucket shops of his day. The bucket shops let traders bet on a stock price, but no trade was executed, the house covered if you were right. How good was he? He was banned from the bucket shops one by one, it was like getting kicked out of a casino because you beat the house so badly with outsized gains. He went on to trade in stocks and commodities and did very well becoming a millionaire many times. Unfortunately he also went bust many times. He made his biggest money in the market crashes of 1907 and 1929,  it is said that J.P. Morgan himself sent word asking for Jesse to please quit shorting stocks. In 1929 the day of one of the biggest market meltdowns he returned home and his wife was scared that he had lost everything, he surprised her by making the biggest money of his trading career. He ended up with the nickname “The Great Bear of Wall Street” because of his shorting activity.

Here are some of his most insightful quotes from his book  “How to Trade in Stocks”

“All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope – that is why the numerical formations and patterns recur on a constant basis”

“Successful traders always follow the line of least resistance – follow the trend – the trend is your friend”

“Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes”

“Just because a stock is selling at a high price does not mean it won’t go higher”

“But careful timing is essential…impatience is costly”

“Markets are never wrong – opinions often are”

“Remember too that it is dangerous to start spreading out all over the market. By this I mean, do not have an “Interest in too many stocks at one time. It is much easier to watch a few than many. I made that mistake years ago and I cost me money”

In the book , Jesse Livermore: World’s Greatest Stock Trader it is said that he loved women and that this lead to the eventual divorce form his first wife. His second marriage was to a women with a very bad history with men. Did this cause his eventual depression and suicide? He rode a roller coaster of extreme wealth and being broke many times in his life, did this wear him out? It is said that he was in a draw drown at the time he killed himself, did he have a hard time living up to his own legend? We will never know but I do know the mental anguish and pain that comes from riding a wild equity curve and I strongly suggest that all traders respect the risk of ruin, when those ten losing trades in a row hit your trading it is much easier to come back from a 10% draw down when you are risking 1% of capital per trade than blowing up when you are just going all in on ever trade. A 10% risk per trade has a 100% risk of ruin in the long term for just about every trading system. I think that was Jesse’s problem he did not manage the risk of ruin, that is how a trader of his caliber and brilliance was ruined financially so many times.

“The only area I may have differed from most speculators, was when I felt I was truly right, dead right, for-damn-sure right-then I would go all the way, shoot the works.” -Jesse Livermore

source:http://www.anirudhsethireport.com/

Inspiring man behind Amul

10 rules for success in business:

§        Don’t wait for a revolutionary idea. It will never happen. Just focus on a simple, exciting, empty space and execute as fast as possible

§        Share your idea. The more you share, the more you get advice and the more you learn. Meet and talk to your competitors.

§       Build a community. Use blogging and social software to make sure people hear about you.

§         Listen to your community. Answer questions and build your product with their feedback.

§        Gather a great team. Select those with very different skills from you. Look for people who are better than you.

§        Be the first to recognise a problem. Everyone makes mistakes. Address the issue in public, learn about and correct it.

§        Don’t spend time on market research. Launch test versions as early as possible. Keep improving the product in the open.

§       Don’t obsess over spreadsheet business plans. They are not going to turn out as you predict, in any case.

§       Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product.

§       Don’t focus on getting rich. Focus on your users. Money is a consequence of success, not a goal.

Source: http://goo.gl/MRbgj

Is this the most sought after job for Next Gen Indians?

Jobs in consultancies and investment banks are still amongst the most sought-after in India, even after the financial crisis of 2008. Rewind to a decade back and it were the software coders that every teenage Indian looked up to and aspired to be. However, it seems that the next generation of Indians would prefer to toil under the burning sun rather than sit in plush air conditioned offices. At least that is what an article in leading business daily claims. It cites the examples of professionals working with MNCs quitting their jobs to become farmers. Yes, you read that right! Given the steady rise in prices of food products in recent months, farming is the next obsession for a small group of young and educated Indians.

Why do the farmers then commit suicide you may ask! Honestly, we ourselves do not see the young and ambitious agricultural entrepreneurs doing too well in the long run. That is unless the government policies change dramatically in their favour.

Despite years of subsidies and minimum pricing offered for agri produce, the small and marginal farmers continue to remain at the mercy of rainfall. True the educated lot can use research and technology to their advantage. But at the end of the day, inability to sell the produce at profitable rates could make the sophisticated farmers as debt burdened as their illiterate peers.

Hence farming could certainly be a good option for a nation of young and largely unskilled population. Literacy and better technology could also help minimize risks. The certainty about rise in commodity particularly food prices makes the option that much more lucrative. However, in the absence of adequate government policies to secure farmlands and make farming a profitable venture, the scope remains limited. We keep our fingers crossed.

source: equitymaster

Success in finance doesn't require extraordinary talents.

What you need instead is a deep seated belief in the school of value investing and the discipline to stick to it come what may. Ruane has laid out four rules that guided his investment career. These are 
1) buy good businesses, 
2) buy businesses with pricing flexibility, 
3) buy net cash generators and 
4) buy stock at modest prices. 
Clearly, not much different from what Buffett follows. And certainly very easy for others to follow as well.

Investing in Silver

India imports more than 4000 tonnes of silver annually which shows the rising demand silver.





Now you can invest in silver through NSEL e-silver easily it is similar to ETF.

Father of Atomic Bomb says about vedas

Access to the Vedas is the greatest privilege this century may claim over all previous centuries.