Dennis, I doubt what you teach works after these 2 months..

[candy_chia]

After reading the sad story by Mossie's remiser, it reminded me of my brother who thought he could beat the market when he raked up contra loss of $30k in 1994 (when he was age 23).

http://forum.shareinvestor.com/archive/ ... 399_1.html

By Mossie on Friday, June 30, 2000 - 12:08 am:
Folks,

I have another story to tell. This time, it's a sad story.

Two days ago, I received word that my former remisier whom I dealt with during my days of folly (1995 to 1997), had just been served with a bankruptcy order. He's in his mid forties and he has four kids, the youngest just five years old. His wife has been forced to work again.

Apparently, his "clients'" contra losses amounted to $1.5m and the broking co. pulled the plug on him. The losses have been outstanding for the past two years. In reality, his "clients'" contra losses were actually his own.

I guess I saw this coming years ago. He was actually my partner in "crime" because we essentially punted the same kind of counters. However, his play size was much larger, much much larger. When I contra-ed on positions of $100,000, his would be $300,000.

I thought he would have learnt his lesson during the Asian crisis. When my semi-detached had to be liquidated, his private apartment had to be sold too. After I sold my house, I moved back with my relatives while he bought a resale 4 room flat.

The similarities between the two of us ended in 1997.

Short of funds, I stepped out of the "casino" and went into a period of introspection for eight months. I analysed my every mistake using charts to pinpoint my entry & exit points. I was determined not to trade at all until I knew where I went wrong.

He, well, he stayed inside the casino and raked up another $1m in losses.

How did he rake up more losses? He felt that, since he had already lost his money, he might as well try to make it back. He tried all the various methods from spending thousands of $$ attending classes on Gann, to methods that involved trading according to stars. Yes, he was also a syndicate member in various counters.

His determination to learn various trading methods was NOT the mistake he committed.

His problem was that his EGO "told" him that he could beat Mr Market. He always felt that he was bigger than Mr Market. So he kept on initiating new positions, trading the little squiggles, the up's and down's.

He was hoping that his trading profits provided his monthly salary. Before he knew it, he went beyond the point of no return. The losses amounted to millions.

I did try to get him to change. I shared with him my research on TIBS, showing him my photocopied copies of the LTA white paper. I showed him the charts of TIBS, how the stock had stopped falling. I told him I had spotted reversal patterns and used volume studies to prove that Invisible Hands (insiders) were accumulating stock. I shared what I thought were basement prices using charts, volume studies and fundamentals.

You would have thought he would be interested in what I had to say. But, NO!

His reply stumped me till today?? He said my strategy was the right strategy PROVIDED that I had the capital to HOLD for the long term. As for him, he doesn't have the capital and so, he had to trade/contra to MAKE the capital. In my mind, I remember clearly my thoughts then; he wasn't Jesse Livermore.

Folks, let's stop & think about this for a while.

Are we OUR worse enemy? What are some trading habits we have that are SELF DESTRUCTIVE? Are we the lazy sort that expects "manna" & rumours to fall from heaven? Do you expect tips to make you money OR are you the sort that believe in hard work, to find out facts for yourselves.

Do you lay blame on yourself, the market & circumstances? Or do you think you are (attributes of fear & greed) your worse enemy?

As an active investor, I ask myself these questions every week.I also remind myself, "BE DISCIPLINED or THE MARKET WILL DISCIPLINE ME". The Market is forever a disciplinarian, especially against those that are lazy & uninformed.

Folks, please set your own rules or the market will set its rules for you.

Kindest regards to all.

Read more about Dennis's sifus:

Mozzie: http://forum.shareinvestor.com/archive/ ... /0EE7038D/
Warren: http://forum.shareinvestor.com/archive/ ... /0EE7074D/

Dennis himself in shareinvestor forum: http://forum.shareinvestor.com/archive/ ... /0EE6FFA2/

Ask me if the slides are unclear or if you have other questions regarding the stuffs shared during the session.

[candy_chia]

Mossie (Dennis' sifu) shared the essence of investing, mastered through encounter with a modest rich man:

I shared with him my ideas about TIBS but he said he preferred to buy Delgro because he could not afford the risk of failure. He started to accumulate Degro around $1.00 to $1.50.

Over the next two to three months, he accumulated slowly and eventually, he acumulated $2million worth. Yes, it's not a typo. He poured $2m into ONE stock!!! Now that stake is worth $6 million and he has since sold 20% to recoup his capital.

I was totally shocked when he told me of his $2m investment. I would caution him, "Uncle, you cannot afford to lose this $$$. Are you sure you know what you are doing??"

His reply to me made so much sense in hindsight. He said, I have been investing in the markets for the last 30 years and each time a crisis happened, stock markets would MELT but would always return. He has always MADE it a POINT to buy on crisis and sell on euphoria.

I said to him, "Uncle, you have always lived modestly. How come you never behaved as though had $2m in the bank?"

His reply was that he always kept a pool of money READY to deploy when CRISIS occurs.

The Asian crisis was the WORSE he has ever experienced and therefore he had to DEPLOY the MOST (yes, the MOST) amount of his capital. In the meantime, he plays bits here and there just to keep abrest of what's happening.

This fine gentleman thought me all about Templeton's maxim number 7.

"Bull markets are born on pessimism, grow on scepticism, mature on optimisim & DIE on euphoria."

http://forum.shareinvestor.com/archive/ ... 38F_1.html

Read more about Dennis's sifus:

Mozzie: http://forum.shareinvestor.com/archive/ ... /0EE7038D/
Warren: http://forum.shareinvestor.com/archive/ ... /0EE7074D/

[candy_chia]

Templeton Maxims
10 Principles for Investment Success

1) Invest for Real Returns

The true objective for any long-term investor is MAXIMUM total real return after taxes

2) Keep an Open Mind

Never adopt permanently any type of asset or any selection method. Try to stay flexible, open minded and sceptical.

Long-term top results are achieved only changing from popular to unpopular the types of securities you favour and your methods of selection.

3) Never Follow the Crowd

If you buy the same securities as other people, you will have the same results as other people. It is impossible to produce a superior performance unless you do something DIFFERENT FROM THE MAJORITY.

To BUY when others are despondently selling and to SELL when others are greedily buying requires the greatest fortitude and PAYS the GREATEST REWARD.

4) Everything Changes

Bear markets have always been TEMPORARY. And so have bull markets. Share prices usually turn upward from 1 to 12 months before the bottom of the business cycle and vice versa.

If a particular industry or type of security becomes popular with investors, that popularity will always prove TEMPORARY and, when lost, May NOT Return for Many Years.

5) Avoid the Popular

When any method for selecting stocks becomes popular, then switch to unpopular methods. Too many investors can spoil any share selection method or any market timing formula.

6) Learn from your Mistakes

“THIS TIME IS DIFFERENT”
are among the most COSTLY FOUR Words in market history.

7) Buy during Times of Pessimism

Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.

The time of Maximum Pessimism is the best time to Buy, and the time of Maximum optimism is the best time to Sell.

Hunt for Value and Bargains

Too many investor focus on outlook and trend. Therefore, more profit is made by focusing on value.
In the stock market the Only way to get a Bargain to buy what Most investors are selling.

9) Search Worldwide

To avoid having all your eggs in the Wrong Basket at the Wrong Time, EVERY INVESTOR SHOULD DIVERSIFY.

If you search worldwide, you will find more bargains and better bargains than by studying only one nation. You also gain the safety of diversification.

10) No-one Knows Everything

An investor who has all the answers doesn’t even understand the questions.

http://www.dryassociates.com/images/maxims.pdf