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1325 You are what you do. A man is defined by his actions, not his memory. Total Recall

1324

If a self-reinforcing process goes on long enough it must eventually become

unsustainable because either the gap between thinking and reality becomes too

wide or the participant's bias becomes too pronounced. Hence, reflexive

processes that become historically significant tend to follow an initially self-

reinforcing, but eventually self-defeating, pattern. That is what I call the boom/bust

sequence. George Soros

1323

Usually some error in the act of valuation is involved. The most common error is a

failure to recognize that a so-called fundamental value is not really independent of

the act of valuation. That was the case in the conglomerate boom, where per-

share earnings growth could be manufactured by acquisitions, and also in the

international lending boom where the lending activities of the banks helped

improve the debt ratios that banks used to guide them in their lending activity. George Soros

1322

Economic theory needs to be fundamentally reconsidered. There is an element of

uncertainty in economic processes that has been largely left unaccounted for... We

must take a radically different view of the role that thinking plays in shaping events. George Soros

1321

Classical economic theory assumes that market participants act on the basis of

perfect knowledge. That assumption is false. The participant's perceptions

influence the market in which they participate, but the market action also

influences the participant's perceptions. They cannot obtain perfect knowledge of

the market because their thinking is always affecting the market and the market is

affecting their thinking. George Soros

1320 If you really want to know yourself, just become a speculator. Trading proverb

1319 There is no way one could produce results like ours without ups and downs. George Soros

1318

The real-time experiment turned out to be a very good idea because it stimulated

my thinking. Having to explain my reasons for making decisions forced me to

become more coherent; it imposed a certain discipline on me, which was very

helpful. George Soros

1317

I felt it was too late to go short, but then I re-read my memo that predicted that they

would go bust and I realized that it could never be too late. It was the only time I

made more than 100 percent on my money on the short side because, as the

stocks went down, I kept topping up my short positions. George Soros

1316

In their worship of logic and rationality, economists are amusingly short-sighted

and irrational. Jack Sparrow

1315

When the California residential home market collapsed, the market thought the

company might go broke, but it survived the test and we made a fortune. That is

when I made the rule that one should own stocks when they have successfully

passed a difficult test, but one should avoid them during the test — something that

is easier said than done. George Soros

1314 I am good at riding the tide, but not the ripples of a swimming pool. George Soros

1313

...I am particularly keen on investment theses that the market is reluctant to

accept. These are usually the strongest. George Soros

1312

[The danger in taking risks] stimulates me. But don't misunderstand what I am

saying: I don't like danger; I like to avoid it. That is what makes my juices flow. George Soros

1311

There is nothing like danger to focus the mind, and I do need the excitement

connected with taking risks in order to think clearly. It is an essential part of my

thinking ability. Risk taking is, to me, an essential ingredient in thinking clearly. George Soros

1310

Risk taking is painful. Either you are willing to bear the pain yourself or you try to

pass it on to others. Anyone who is in a risk taking business but cannot face the

consequences is no good. George Soros

1309

I am outside. I am a thinking participant and thinking means putting yourself

outside the subject you think about. Perhaps it comes easier to me than to many

others because I have a very abstract mind and I actually enjoy looking at things,

including myself, from the outside. George Soros

1308

Most of the time we are punished if we go against the trend. Only at inflection

points are we rewarded. George Soros

1307

I watch out for telltale signs that a trend may be exhausted. Then I disengage from

the herd and look for a different investment thesis. Or, if I think the trend has been

carried to excess, I may probe going against it. George Soros

1306

The prevailing wisdom is that markets are always right. I take the opposite

position. I assume that markets are always wrong. Even if my assumption is

occasionally wrong, I use it as a working hypothesis. George Soros

1305

Being so critical, I am often considered a contrarian. But I am very cautious about

going against the herd; I am liable to be trampled on... Most of the time I am a

trend follower, but all the time I am aware that I am a member of the herd and I am

on the lookout for inflection points. George Soros

1304 Are you gonna bark all day, little doggie, or are you gonna bite? Reservoir Dogs

1303

I come from the water, that weren't no easy thing... It's more than nature, it's like

my destiny... The Toadies

1302 'Get a hunch and bet a bunch.' Trading proverb

1301

When everyone 95% agrees on something — home prices will never decline,

China can't be stopped, commodities can't go down, etc. — there is real risk of

'everyone' taking a frying pan to the face. Jack Sparrow

1300

To others, being wrong is a source of shame; to me, recognizing my mistakes is a

source of pride. Once we realize that imperfect understanding is the human

condition, there is no shame in being wrong, only in failing to correct our mistakes. George Soros

1299

I look for conditions of disequilibrium. They send out certain signals that activate

me. So my decisions are really made using a combination of theory and instinct. If

you like, you may call it intuition. George Soros

1298

I work with hypotheses. I form a thesis about the anticipated sequence of events

and then I compare the actual course of events with my thesis; that gives me a

criterion by which I can evaluate my hypothesis. George Soros

1297

I would put it this way: I do not play according to a given set of rules; I look for

changes in the rules of the game. George Soros

1296 Making money in commodities is easy -- but just try to keep it. Trading proverb

1295

If you want to make a birthday cake from scratch, you must first create the

universe. Carl Sagan

1294

That is the nature of pattern recognition, asking 'What can I infer about this

situation based on similarities to what I already know and trust that I understand?'

There is less emphasis on trying to reason out things on the basis that they are

special because they are unique, which in a financial context is perhaps the

definition of a speculation... It creates an impulse always to connect new

knowledge to old and to primarily be interested in new knowledge that genuinely

builds on the old. Alice Schroeder

1293

People who are psychologically and financially invested in a stock work very hard

to resolve any newly arisen cognitive dissonance in favor of their vested interests. Alice Schroeder

1292

As humans, our brains aren't really wired to make good probabilistic decisions.

(Actually, this is a huge understatement; many of us never fully grasp the ideas of

probability and expectation at all.) Dan Harrington

1291

But of course there is no secret; there is only the doing of all those little things,

each one done correctly, time and again, until excellence in every detail becomes

a firmly ingrained habit, an ordinary part of one's everyday life. Daniel F. Chambliss

1290

In the pursuit of excellence, maintaining mundanity is the key psychological

challenge. In common parlance, winners don’t choke. Faced with what seems to

be a tremendous challenge or a strikingly unusual event, such as the Olympic

Games, the better athletes take it as a normal, manageable situation ('It's just

another swim meet,' is a phrase sometimes used by top swimmers at a major

event such as the Games) and do what is necessary to deal with it. Daniel F. Chambliss

1289

Athletes move up to the top ranks through qualitative jumps: noticeable changes in

their techniques, discipline, and attitude, accomplished usually through a change in

settings (e.g., joining a new team with a new coach, new friends, etc.) who work at

a higher level. Without such qualitative jumps, no major improvements

(movements through levels) will take place... Daniel F. Chambliss

1288

Superlative performance is really a confluence of dozens of small skills or

activities, each one learned or stumbled upon, which have been carefully drilled

into habit and then are fitted together in a synthesized whole. There is nothing

extraordinary or superhuman in any one of those actions; only the fact that they

are done consistently and correctly, and all together, produce excellence. Daniel F. Chambliss

1287

Every generation has its characteristic folly, but the basic cause is the same:

People persist in believing that what has happened in the recent past will go on

happening into the indefinite future, even while the ground is shifting under their

feet. George J. Church

1286

A great company could be a terrible investment if its price rise has already more

than discounted the bullish fundamentals. Conversely, a company that has been

experiencing problems and is the subject of negative news could be a great

investment if its price decline has more than discounted the bearish information. Jack Schwager

1285

When to get out of a position is as important as when to get in. Any market

strategy that ignores trade liquidation is by definition incomplete. Jack Schwager

1284

Risk control should not be confused with fear of risk. A willingness to accept risk is

probably an essential personality trait for a trader. Jack Schwager

1283

One of the greatest tragedies of life is the murder of a beautiful theory by a gang of

brutal facts. Benjamin Franklin

1282

Even great traders sometimes have completely wrongheaded ideas when they

start. They ultimately succeed, however, because they have the flexibility to

change their approach. Jack Schwager

1281

Define a target, a strategy consistent with the target, a set of disciplines to follow,

and risk management guidelines. Then trade, track, and evaluate your

performance. Ari Kiev

1280

The objective of setting a target is not necessarily to reach it, but rather to

establish a standard against which to measure your performance. If you are not

reaching your target, it forces you to focus on what you are doing wrong or what

you may not be doing that you should. The target holds you to a higher standard of

performance. Ari Kiev

1279

Believing that an outcome is possible makes it achievable. The classic example is

Roger Bannister's penetration of the four-minute mile mark. Before he ran his sub

four-minute mile in 1954, this feat was considered an impossible barrier that was

beyond human physical capabilities. After he ran his so-called magic mile, many

other runners suddenly began breaking this once seemingly impossible barrier. Ari Kiev

1278

The mind must always be in the state of 'flowing,' for when it stops anywhere that

means the flow is interrupted and it is this interruption that is injurious to the well-

being of the mind. In the case of the swordsman, it means death. When the

swordsman stands against his opponent, he is not to think of the opponent, nor of

himself, nor of his enemy's sword movements. He just stands there with his sword

which, forgetful of all technique, is ready only to follow the dictates of the

subconscious. The man has effaced himself as the wielder of the sword. When he

strikes, it is not the man but the sword in the hand of the man's subconscious that

strikes. Zen master Takuan

1277

The mind could be said to be working at a very high speed, but with no intentions,

plans or direction. In analogy a clear mind is compared to a still pond, which is able

to clearly reflect the moon and trees. But just as waves in the pond will distort the

picture of reality, so will the thoughts we hold onto disrupt the true perception of

reality. Wikipedia (Mushin)

1276

Mushin is achieved when a person's mind is free from thoughts of anger, fear, or

ego during combat or everyday life. There is an absence of discursive thought and

judgment, so the person is totally free to act and react towards an opponent

without hesitation and without disturbance from such thoughts. At this point, a

person relies not on what they think should be the next move, but what is their

trained natural reaction or what is felt intuitively. Wikipedia (Mushin)

1275

Clouds are not spheres, mountains are not cones, coastlines are not circles, and

bark is not smooth — nor does lightning travel in a straight line. Benoit Mandelbrot

1274

Think. Prepare. Plan in advance when there's no time pressure. Then, in real life,

do what you said. Mike Bloomberg

1273

Being a great trader is a process. It's a race with no finish line. The markets are

not static. No single style or approach can provide superior results over long

periods of time. To continue to outperform, the great traders continue to learn and

adapt. Jack Schwager

1272

You can't control what the market does, but you can control your reaction to the

market. I examine what I do all the time. That's what trading is all about. Steve Cohen

1271

You can't have everybody on one side of the fence. The world doesn't work that

way. Steve Cohen

1270

When I saw that screen light up that day in the Merrill Lynch offices, I lost any

residual doubt that Bloomberg could make it. We had picked just the right project.

It was big enough to be useful, small enough to be possible. Start with a small

piece, fulfill one goal at a time, on time. Do it with all things in life. Sit down and

learn to read one-syllable words. If you try to read Chaucer in elementary school,

you'll never accomplish anything. You can't jump to the end game right away, in

computers, politics, love, or any other aspect of life. Mike Bloomberg

1269

I have friends who get emotional about the market. They fight it. Why put yourself

in that position? Steve Cohen

1268

The thing is to start moving your feet. I find that too many traders just stand there

and let the truck roll over them. Steve Cohen

1267

If I am in a trade because of a catalyst, the first thing I check is whether the

catalyst still applies. Steve Cohen

1266

[Wharton] taught you that 40 percent of a stock's price movement was due to the

market, 30 percent to the sector, and only 30 percent to the stock itself, which is

something that I believe is true. I don't know if the percentages are exactly correct,

but conceptually the idea makes sense. Steve Cohen

1265

Whatever attitude you are in, do not be conscious of making the attitude; think only

of cutting. Miyamoto Musashi

1264

Hand reading works because most players play most hands in a relatively logical

way most of the time. By bringing logic to bear on their decisions, you can keep

eliminating hands that don't fit the observed data. Dan Harrington

1263

If you can get savage capitalists to rationally act like a team, then you have a

beautiful thing. Cliff Asness

1262 They can steal your idea, but they can't steal execution. Silicon Valley proverb

1261

David didn't beat Goliath with a whiteboard. Go get amongst it, and prepare to bob

and weave. Tim Ferriss

1260

It comes down to trying to expose yourself to the best things that humans have

done — and then try to bring those things into what you're doing. Steve Jobs

1259

A market that is driven by inflows can have small corrections, but it has to then

immediately recover to new highs to keep generating new money inflows.

Otherwise, money inflows are likely to dry up, and the market will fall apart.

Therefore, this type of market is likely to either trend higher or break sharply. John Bender

1258

Each stock has its own probability distribution that depends on a host of factors.

Who has what position? Where did the major buyers accumulate their positions?

Where are their stop-loss points? What price levels are likely to be technically

significant? John Bender

1257

It's not a matter of coming up with a one-size-fits-all model that is better than the

standard Black-Scholes model. The key point is that the correct probability

distribution is different for every market and every time period. The probability

distribution has to be estimated on a case-by-case basis. John Bender

1256

Regardless of whether technical analysis has any validity, enough people believe

in it to impact the market. For example, if people expect a stock to find support at

65, lo and behold, they're willing to buy it at 66. That is not a random walk

statement. John Bender

1255

It might seem that if you have an edge, the way to maximize the edge is to trade as

big as you can. But that's not the case, because of risk. As a professional gambler

or as a trader, you are constantly walking the line between maximizing edge and

minimizing your risk of tapping out. John Bender

1254

I don't think anyone is more disciplined than I am. When I put on a trade, I have a

contingency plan for every possible outcome. I can't think of any circumstance that

would be an exception. If there were, I would have a plan for that too. Mark Minervini

1253

Normal human tendencies are traits that cause you to do poorly. Therefore, to be

successful as a trader you need to condition abnormal responses. You hear many

traders say that you have to do the opposite of your gut response — when you feel

good about a position you should sell, and when you feel terrible about it, you

should buy more. In the beginning that's true, but as you condition yourself for

abnormal responses, somewhere along the line you become skilled. Then your gut

becomes right. Mark Minervini

1252

I would rather get stopped out of a trade five times in a row, taking a small loss

each time, than take one large loss. Mark Minervini

1251

Most people just cannot weather the learning curve. As soon as it gets difficult, and

their approach isn't working up to their expectations, they begin to look for

something else. As a result, they become slightly efficient in many areas without

becoming very good in any single methodology. The reality is that it takes a very

long time to develop a superior approach, and along the way, you are going to go

through periods where you do poorly. Ironically, those are the periods that give you

the most valuable information. Mark Minervini

1250

First and foremost, understand that you will always make mistakes. The only way

to prevent mistakes from turning into disasters is to accept losses while they are

small and then move on. Mark Minervini

1249

I constantly try to figure out how the market can trick or fool the majority of

investors. Then after the majority have been fooled I get in at what I call the 'point

of smooth sailing.' A so-called failed signal can actually be the beginning of a more

complex pattern that is far more reliable than the initial signal based on a

conventional pattern. Mark Minervini

1248

Let's say I buy a stock because of a signal and the market dips enough to stop me

out. The stock then witnesses a huge reversal and closes near the high of the day.

That price action may be an indication that there was a shakeout, which knocked

out most of the weak hands, and the stock is ready to go up. Putting the long back

on at that point may well be a higher probability trade than the original trade. Mark Minervini

1247

You can't get beat if you have a great defense. I would always prefer to bet on a

football team that has a great defense as opposed to one that has a great offense.

If a trade doesn't work out quickly, I take a small loss, and I may have to take a

small loss many times. Mark Minervini

1246

The key is to know when to do nothing. Most people, even if they have a winning

strategy, will not follow it because they lack discipline. Mark Minervini

1245 I think that anyone who wants to be a trader should learn how to play poker. Mark Minervini

1244

My results were transformed when I understood that what counts isn't how often

you're right, but how much you profit on your winning trades versus how much you

lose on your losing trades. On average, I'm only profitable about 50 percent of the

time, but I make much more when I'm right than I lose when I'm wrong. Mark Minervini

1243

If you are a beginner, trade with an amount of money that is small enough so that

you can afford to lose it, but large enough so that you will feel the pain if you do.

Otherwise, you're fooling yourself. Mark Minervini

1242

It is much better to learn the lesson that you can lose everything when you don't

have that much money than to learn the same lesson later on. Mark Minervini

1241

Containing your losses is 90 percent of the battle, regardless of the strategy. In

addition, if you put yourself in a position to buy stocks that have the potential to go

up a lot, your odds will be better. Mark Minervini

1240

You have all these people trying to come up with formulas to beat the market. The

market is not a science. The science may help increase the probabilities, but to

excel you need to master the art of trading. Mark Minervini

1239

My basic philosophy is: Expose your portfolio to the best stocks that the market

has to offer and cut your losses very quickly when you're wrong. That one

sentence essentially describes my strategy. Mark Minervini

1238

The motivation is always the same. Although I may hold the position much longer, I

am buying the stock because I think it will go up within hours or at most days. Mark Minervini

1237

When you buy an option, the premium steadily evaporates over time. It's like

holding an ice cube in your hand: the longer it's there, the more it diminishes until

finally it doesn't exist at all. Mark Cook

1236

Bad traders don't make profits — they only take out short-term loans from the

market. Wall Street proverb

1235 When the levee breaks, momma you got to move... Led Zeppelin

1234

When everything happens at once, wide and fast moving problems simply route

around any central authority. Therefore overall governance must arise from the

most humble interdependent acts done locally in parallel, and not from a central

command. Kevin Kelly

1233

The work of managing a natural environment is inescapably a work of local

knowledge. Kevin Kelly

1232 In turbulence is the preservation of the world. Kevin Kelly

1231

The nature of life is to delight in all possible loopholes. Every creature is in some

way hacking a living by reinterpreting the rules. Kevin Kelly

1230 'It works, why worry?' is life's deepest philosophy. Kevin Kelly

1229 A network nurtures small failures in order that large failures don't happen as often. Kevin Kelly

1228

There is nothing to be found in a beehive that is not submerged in a bee. And yet

you can search a bee forever with cyclotron and fluoroscope, and you will never

find a hive. Kevin Kelly

1227 Complexity must be grown from simple systems that already work. Kevin Kelly

1226

Hope should never be in your vocabulary. It is the worst four-letter word I know. As

soon as you say, 'Boy, I hope this position comes back,' you should reduce your

size. Mark Cook

1225

I would attribute my own success to having both conviction about my gut feelings

and the ability to act on them quickly. That is so critical. Stuart Walton

1224

When I talk to potential new investors I focus on my mistakes. Because if you are

going to invest with someone, you want that person to have made mistakes on his

own tab and not to make them on yours. Someone who has never made a mistake

is dangerous, because mistakes will happen. If you've made mistakes, you realize

they can recur, and it makes you more careful. Stuart Walton

1222

Hazarding guesses (extremely rough ones, for that matter) about the behavior of a

population has some meaning. It is, however, almost impossible to foresee the

behavior of an individual, even on a day-to-day basis. In the same way, the

physicist can prognosticate with great exactitude the time a gram of radium will

need to halve its activity but is totally unable to say when a single atom of that

same radium will disintegrate. Primo Levi

1221 Patience was still needed, in unforeseeable doses; yet more patience. Primo Levi

1220

This company looks cheap, that company looks cheap, but the overall economy

could completely screw it up. The key is to wait. Sometimes the hardest thing to do

is to do nothing. David Tepper

1219 A foolish consistency is the hobgoblin of little minds. Ralph Waldo Emerson

1218 Give me a horse I can ride! John Facenda

1217

Sometimes the opportunities are so obvious that you almost can't lose when they

come around; the only problem is that they don't come around that often. The key

is not to lose money in the times in between. Stuart Walton

1216

My philosophy is to float like a jellyfish and let the market push me where it wants

to go. I don't draw a line in the sand and say this is my strategy and I'm going to

wait for the market to come to me. I try to figure out what strategies are working in

the market. Stuart Walton

1215

To me, the successful stock is not one that I bought at 10 and held to a 100, but

one where I picked up 7 points here, 5 points here, another 8 here, and caught a

major part of the move. Stuart Walton

1214

The theme I noticed back then that has persisted through bull and bear markets is:

Good companies, on balance, continue to go up. Grandmothers in Kansas City

know that. Stuart Walton

1213

I really admire people who do what they want to do and don't care about anything

else. I had a friend in college who was determined to be a rock and roll star. He

formed the band The Cowboy Junkies. When he started college, he couldn't even

play a guitar, and now he is sold out at every concert. Stuart Walton

1212

There is timing in the whole life of the warrior, in his thriving and declining, in his

harmony and discord. Similarly, there is timing in the Way of the merchant, in the

rise and fall of capital. All things entail rising and falling timing. You must be able to

discern this. In strategy there are various timing considerations. From the outset

you must know the applicable timing and the inapplicable timing, and from among

the large and small things and the fast and slow timings find the relevant timing,

first seeing the distance timing and the background timing. This is the main thing in

strategy. It is especially important to know the background timing, otherwise your

strategy will become uncertain. Miyamoto Musashi

1211

Management of one's emotional state is critical. The truly exceptional traders can

stand up to anything. Instead of getting emotional when things don't go their way,

they remain calm and act in accordance with their approach. Charles Faulkner

1210

People need to have a perceptual filter that matches the way they think. The

appropriate perceptual filter for a trader has more to do with how well it fits a

trader's mental strategy, his mode of thinking and decision making, than how well it

accounts for market activity. When a person gets to know any perceptual filter

deeply, it helps develop his or her intuition. There's no substitute for experience. Charles Faulkner

1209 Today's mistake is tomorrow's insight. Jack Sparrow

1208

Capitalism, then, is by nature a form or method of economic change and not only

never is but never can be stationary...The opening up of new markets, foreign or

domestic, and the organizational development from the craft shop and factory to

such concerns as US Steel illustrate the same process of industrial mutation — if I

may use that biological term — that incessantly revolutionizes the economic

structure from within, incessantly destroying the old one, incessantly creating a

new one. This process of Creative Destruction is the essential fact about

capitalism. Joseph Schumpeter

1207

Same as it ever was, same as it ever was. Same as it ever was, and look where

my hand was. Time isn't holding us, and time isn't after us. Same as it ever was,

same as it ever was... Talking Heads

1206

What we've got here is... failure to communicate. Some men, you just can't reach.

So you get what we had here last week. Which is the way he wants it. Well, he

gets it. And I don't like it any more than you men. Cool Hand Luke

1204

In a nutshell, if you're too conservative, you won't do any trades, and if you're too

aggressive, you're going to get picked off a lot. The trick is to try to strike a balance

between the two. Jeff Yass

1203

Just by watching markets, I noticed that prices tend to come down much harder

and faster than they go up. Jeff Yass

1202

...the poker world is so competitive that if you don't fully capitalize on every

advantage, you're not going to survive. I absolutely understood that concept by the

time I got down to the options floor. I learned more about options trading strategy

by playing poker than I did in all my college economics courses combined. Jeff Yass

1201

We actually use poker strategy in training our option traders, because we feel the

parallels are very strong. I believe that if I can teach our trainees the correct way to

think about poker, I can teach them the right way to trade options. Jeff Yass

1200

There are very few people who can develop the skills to get the edge, and far

fewer still who can withstand the losses emotionally and still stick with the system.

Probably only one in five hundred people has the necessary discipline to be

successful. Blair Hull

1199

The people who want to be recognized as the greatest traders are probably not the

greatest traders. Egos get in the way of the process. In my opinion, you never want

to be the largest player in the pit. Blair Hull

1198

In a sense, I owe everything that I have to the state of Nevada. It not only provided

me with my original trading stake, but the betting experience taught me a lot of

things that allowed me to become a successful trader. Blair Hull

1197

If you get too careful about not risking your gains, you're not going to be able to

extract a large profit. Mark Ritchie

1196

You need to have the courage to stand up against the crowd, decide your position,

and execute it. Mark Ritchie

1195

Magnitude of losses and profits is purely a matter of position size. Controlling

position size is indispensable to success. Of all the traits necessary to trade

successfully, this factor is the most undervalued. Mark Ritchie

1194

Understand that learning the markets can take years. Immerse yourself in the

world of trading and give up everything else. Get as close to other successful

traders as you can.

Linda Bradford

Raschke

1193 Fall down seven times, stand up eight. Japanese Proverb

1192

Part of the trading process is testing the water. If your entry timing is good enough,

you won't lose much even when you're wrong.

Linda Bradford

Raschke

1191

I think investment psychology is by far the most important element, followed by risk

control, with the least important consideration being the question of where you buy

and sell. Tom Basso

1190

I liken emotions in trading to a spring, with emotions being stretched up and down,

up and down. While it's going up and down, it's kind of thrilling, but eventually the

spring wears out. Burnout sets in, and you realize that maybe it isn't so much fun

to be on this emotional roller coaster. You find that if you can just keep your

emotions in balance in the middle, it's actually a whole lot more fun. Tom Basso

1189

I'm fond of thinking of trading in terms of scores of years. If I live long enough, I'll

trade for fifty or sixty years. I figure that, over that time span, I'll see devastating

declines, spectacular advances that I virtually can't believe, and everything in

between. Tom Basso

1188

After my years of experience in the markets, I now try to keep my models as

flexible as I possibly can. I try to imagine scenarios that would almost make good

movie plots. Tom Basso

1187

I know this will sound like a cliche, but the single most important reason that

people lose money in financial markets is that they don't cut their losses short. It is

a curiosity of human nature that no matter how many books talk about this rule,

and no matter how many experts offer this advice, people still keep making the

same mistake. Victor Sperandeo

1186

We are still a multimedia organism. If we want to push the envelope of complexity

further, we have to use all of our devices for accessing information — not all of

which are rational.

Mihaly

Csikszentmihalyi

1185

The ego falls away. Time flies. Every action, movement, and thought follows

inevitably from the previous one, like playing jazz. Your whole being is involved,

and you're using your skills to the utmost.

Mihaly

Csikszentmihalyi

1184

Choiceless awareness is a quality of mind that is free from making judgments,

decisions or generating commentary as it meets with sense experiences. It is a

mind that responds to each new moment without the burden of its past history or

making future projections. Matthew Flickstein

1183

To watch the behavior of a man who acts not according to reason, but according to

his own deep impulses, is a spectacle of extreme interest, similar to that which the

naturalist enjoys when he studies the activities of an animal of complex instincts. Primo Levi

1182

The ultimate result of shielding men from the effects of folly is to fill the world with

fools. Herbert Spencer

1181

In my opinion, the greatest misconception is the idea that if you buy and hold

stocks for long periods of time, you'll always make money. Victor Sperandeo

1180

In trading, you can't hide your failures. Your equity provides a daily reflection of

your performance. The trader who tries to blame his losses on external events will

never learn from his mistakes. Victor Sperandeo

1179

The key to trading success is emotional discipline. Making money has nothing to

do with intelligence. Think of all the bright people that choose careers on Wall

Street. If intelligence were the key, there would be a lot more people making

money trading. Victor Sperandeo

1178

Successful speculation implies taking risk when the odds are in your favor. Just

like in poker, where you have to know which hands to bet on, in trading you have

to know when the odds are in your favor. Victor Sperandeo

1177

The fact that we live at the bottom of a deep gravity well, on the surface of a gas-

covered planet going around a nuclear fireball 90 million miles away, and think this

to be normal, is obviously some indication of how skewed our perspective tends to

be. Douglas Adams

1176

A trading philosophy is something that cannot just be transferred from one person

to another, it's something that you have to acquire yourself through time and effort. Richard Driehaus

1175

The essential element is having a core philosophy. Without a core philosophy

you're not going to be able to hold on to your positions or stick with your trading

plan during really difficult times. You must fully understand, strongly believe in, and

be totally committed to your trading philosophy. Richard Driehaus

1174

Most people believe high turnover is risky, but I think just the opposite. High

turnover reduces risk when it's the result of taking a series of small losses in order

to avoid larger losses. I don't hold on to stocks with deteriorating fundamentals or

price patterns. For me, this kind of turnover makes sense. It reduces risk; it doesn't

increase it. Richard Driehaus

1173

The wonderful thing about our business is that it's liquid, and you can wipe the

slate clean on any day. As long as I'm in control of the situation — that is, as long

as I can cover my positions — there's no reason to be nervous. Stan Druckenmiller

1172

In secular bear markets, fighting general conditions is an expensive habit. Wall

Street is addicted to this habit by design. Jack Sparrow

1171 Survive and advance. Jim Valvano

1170

The more extensive a man's knowledge of what has been done, the greater will be

his power of knowing what to do. Benjamin Disraeli

1169 The secret of success is constancy of purpose. Benjamin Disraeli

1168 Nurture your mind with great thoughts; to believe in the heroic makes heroes. Benjamin Disraeli

1167 What we learn from history is that we do not learn from history. Benjamin Disraeli

1166

Wall Street ices the inefficient cake with compulsive conformity. Everyone gets on

the bandwagon and stays until the evidence is too compelling, then they all fall off

with a jolt.

The Art of Short

Selling

1165

Soros has taught me that when you have tremendous conviction on a trade, you

have to go for the jugular. It takes courage to be a pig. It takes courage to ride a

profit with huge leverage. As far as Soros is concerned, when you're right on

something, you can't own enough. Stan Druckenmiller

1164

I've learned many things from [George Soros], but perhaps the most significant is

that it's not whether you're right or wrong that's important, but how much money

you make when you're right and how much you lose when you're wrong. The few

times that Soros has ever criticized me was when I was really right on a market

and didn't maximize the opportunity. Stan Druckenmiller

1163

The way to attain truly superior long-term returns is to grind it out until you're up 30

or 40 percent, and then if you have the convictions, go for a 100 percent year. If

you can put together a few near-100 percent years and avoid down years, then

you can achieve really outstanding long-term returns. Stan Druckenmiller

1162

George Soros has a philosophy that I have also adopted: The way to build long-

term returns is through preservation of capital and home runs. You can be far more

aggressive when you're making good profits. Stan Druckenmiller

1161

I never use valuation to time the market. I use liquidity considerations and

technical analysis for timing. Valuation only tells me how far the market can go

once a catalyst enters the picture to change the market direction. Stan Druckenmiller

1160

Frankly, even today, many analysts still don't know what makes their stocks go up

or down. Stan Druckenmiller

1159

The essential element is that the markets are ultimately based on human

psychology, and by charting the markets you're merely converting human

psychology into graphic representations. Al Weiss

1157

The most liquid period is the opening. Liquidity starts falling off pretty quickly after

the opening. The second most liquid time of day is the close. Trading volume

typically forms a U-shaped curve throughout the day. There's a lot of liquidity right

at the opening, it then falls off, reaching a nadir at midday, and then it starts to

climb back up, reaching a secondary peak on the close. Generally speaking, this

pattern holds in almost every market. It's actually pretty amazing. Monroe Trout

1156

The desire to maximize the number of winning trades (or minimize the number of

losing trades) works against the trader. The success rate of trades is the least

important performance statistic and may even be inversely related to performance. William Eckhardt

1155

The market behaves much like an opponent who is trying to teach you to trade

poorly... The market likes to lull you into the false security of high success rate

techniques, which often lose disastrously in the long run. The general idea is that

what works most of the time is nearly the opposite of what works in the long run. William Eckhardt

1154

When you're on a big winning streak, there's a temptation to think that you're doing

something special, which will allow you to continue to propel yourself upward. You

start to think that you can afford to make shoddy decisions. You can imagine what

happens next. As a general rule, losses make you strong and profits make you

weak. William Eckhardt

1153

While amateurs go broke by taking large losses, professionals go broke by taking

small profits. The problem in a nutshell is that human nature does not operate to

maximize gain but rather to maximize the chance of a gain. William Eckhardt

1152

One common adage on this subject that is completely wrongheaded is: You can't

go broke taking profits. That's precisely how many traders do go broke. William Eckhardt

1151

Watch idly while profit-taking opportunities arise, but in adversity run like a

jackrabbit. William Eckhardt

1150

Anyone with average intelligence can learn to trade. This is not rocket science.

However, it's much easier to learn what you should do in trading than to do it.

Good systems tend to violate normal human tendencies. Of the people who can

learn the basics, only a small percentage will be successful traders. William Eckhardt

1149 To conquer fate, go ahead and meet it. Dickson G. Watts

1148

I haven't seen much correlation between good trading and intelligence. Some

outstanding traders are quite intelligent, but a few aren't. Many outstandingly

intelligent people are horrible traders. Average intelligence is enough. Beyond that,

emotional makeup is more important. William Eckhardt

1147

Trading size is one aspect you don't want to optimize. The optimum comes just

before the precipice. William Eckhardt

1146

The desire to find patterns is the same human quirk that convinces people that

there is validity in superstitions, or astrology, or fortune tellers. The successes are

much more startling than the failures. You remember the times when the oracle

really hit the nail on the head, and you tend to forget the cases in which the

prediction was ambiguous or wrong. William Eckhardt

1145

The human mind was made to create patterns. It will see patterns in random data.

A turn-of-the-century statistics book put it this way: 'Too fine an eye for pattern will

find it everywhere.' William Eckhardt

1144

As a general rule, be very skeptical of your results. The better a system looks, the

more adamant you should be in trying to disprove it. This idea goes very much

against human nature, which wants to make the historical performance of a system

look as good as possible. William Eckhardt

1143

The lack of intrinsic meaning of angles on a bar chart has significance even for

chart-oriented traders who do not employ angles. How sharply a trend slopes on a

chart is often a psychological consideration in making a trade. If you fall prey to

this influence, you're letting the chart maker's practical and aesthetic

considerations impinge on your trading. Any trend can be made to look either

gentle or steep by adjusting the price scale. William Eckhardt

1142

In general, the delicate tests that statisticians use to squeeze significance out of

marginal data have no place in trading. We need blunt statistical instruments,

robust techniques. William Eckhardt

1141

Sometimes the reason people lose is that they're not sufficiently selective. Upon

analysis, a trader may find that if he only concentrates on the trades that do well

and lets go of the other types of trades, he might actually be successful. Randy McKay

1140

One very interesting thing I've found is that virtually every successful trader I know

ultimately ended up with a trading style suited to his personality. Randy McKay

1139

When you're trading well, you have a better mental attitude. When you're trading

poorly, you start wishing and hoping. Instead of getting into trades you think will

work, you end up getting into trades you hope will work. Randy McKay

1138

The most important advice is to never let a loser get out of hand... I'll keep on

reducing my trading size as long as I'm losing. I've gone from trading as many as

three thousand contracts per trade to as few as ten when I was cold, and then

back again. Randy McKay

1137

One of the things I did that worked in those early years was analyzing every single

trade I made. Every day, I made copies of my cards and reviewed them at home.

Every trader is going to have tons of winners and losers. You need to determine

why the winners are winners and the losers are losers. Once you can figure that

out, you can become more selective in your trading and avoid those trades that are

more likely to be losers. Randy McKay

1136

You don't want to have a position before a move has started. You want to wait until

the move is already under way before you get into the market. Randy McKay

1135

The beginning of a price move is usually hard to trade because you're not sure

whether you're right about the direction of the trend. The end is hard because

people start taking profits and the market gets very choppy. The middle of the

move is what I call the easy part. Randy McKay

1134

So many people want the positive rewards of being a successful trader without

being willing to go through the commitment and pain. And there's a lot of pain. Bill Lipschutz

1133

It's not enough to simply have the insight to see something apart from the rest of

the crowd, you also need to have the courage to act on it and to stay with it. It's

very difficult to be different from the rest of the crowd the majority of the time,

which by definition is what you're doing if you're a successful trader. Bill Lipschutz

1132

The really best traders don't think twice about how many hours they're working or

whether they come in on a weekend. There's no substitute for that level of

commitment. Bill Lipschutz

1131

[Superior] traders have tremendous commitment to the markets — to their craft, so

to speak. They develop scenarios, reevaluate scenarios, collect information, and

reevaluate that information. They constantly ask themselves: What am I doing

right? What am I doing wrong? How can I do what I am doing better? How can I

get more information? It's obsessive. Bill Lipschutz

1130

...playing out scenarios is something that I do all the time. That is a process a

fundamental trader goes through constantly. What if this happens? What if this

doesn't happen? How will the market respond? What levels will the market move

to? Bill Lipschutz

1129

I don't have a problem letting my profits run, which many traders do. You have to

be able to let your profits run. I don't think you can consistently be a winning trader

if you're banking on being right more than 50 percent of the time. Bill Lipschutz

1128

You have to trade at a size such that if you're not exactly right in your timing, you

won't be blown out of your position. My approach is to build to a larger size as the

market is going my way. Bill Lipschutz

1127

Foreign exchange is a very psychological market... if you move the market 4

percent, for example, you're probably going to change the market psychology for

the next few days. Bill Lipschutz

1126

When you're in a losing streak, your ability to properly assimilate and analyze

information starts to become distorted because of the impairment of the confidence

factor, which is a by-product of a losing streak. You have to work very hard to

restore that confidence, and cutting back trading size helps achieve that goal. Bill Lipschutz

1125

There are a lot of elements to risk control: Always know exactly where you stand.

Don't concentrate too much of your money on one big trade or group of highly

correlated trades. Always understand the risk-reward of the trade as it now stands,

not as it existed when you put the position on. Bill Lipschutz

1124

Not everyone is going to interpret things in the same way, at the same time, as you

do, and it's important to understand that. You need to be plugged into the news

and to know what the market is looking at. For example, one day the foreign

exchange market may be focusing on interest rate differentials; the next day the

market may be looking at potential for capital appreciation, which is exactly the

opposite. Bill Lipschutz

1123

We cannot grow without challenge. Challenges routinely produce crises that

severely test us. However, crises also offer us the greatest opportunities. Steven Callahan

1122

...voyaging through wildernesses, be they full of woods or waves, is essential to

the growth and maturity of the human spirit. It is in the wilderness that you really

learn who you are. It is in facing the challenges of the wilderness that the thickness

of your wallet becomes irrelevant and your capabilities become the truer measure

of your value. Steven Callahan

1121

The freedom of the sea lures men, yet freedom does not come free. Its cost is the

loss of the security of life on land. When a storm is brewing, the sailor cannot

simply park his ship and walk away from it. He cannot hide within stone walls until

the whole thing blows over. There is no freedom from nature, the power that binds

even the dead together. Sailors are exposed to nature's beauty and her ugliness

more intensely than most men ashore. I have chosen the sailor's life to escape

society's restrictions and I have sacrificed its protection. I have chosen freedom

and I have paid the price.

Adrift: 76 Days Lost At

Sea

1120

The most appropriate description of man as differentiated from nonhuman beings

is: a being purposively struggling against the forces adverse to his life. Ludwig Von Mises

1119

There are many who find a good alibi far more attractive than an achievement. For

an achievement does not settle anything permanently. We still have to prove our

worth anew each day; we have to prove that we are as good today as we were

yesterday. But when we have a valid alibi for not achieving anything we are fixed,

so to speak, for life. Eric Hoffer

1118 Most battles are won before they are ever fought.

General George S.

Patton

1117 Life shrinks or expands in proportion to one's courage. Anais Nin

1116

Reason's biological function is to preserve and promote life and to postpone its

extinction as long as possible. Thinking and acting are not contrary to nature; they

are, rather, the foremost features of man's nature. Ludwig Von Mises

1115

You've got to think about doing big things while you're doing small things, so all the

small things go in the right direction. Alvin Toffler

1114

When you really believe that trading is simply a probability game, concepts like

'right' and 'wrong' or 'win' and 'lose' no longer have the same significance. As a

result, your expectations will be in harmony with the possibilities. Mark Douglas

1113

How much heat can you stand? Money management is a thermostat — a control

system for risk that keeps your trading within the comfort zone. Gibbons Burke

1112

Everyone has talent. What is rare is the courage to follow the talent to the dark

place where it leads. Erica Jong

1111

Take your life in your own hands and what happens? A terrible thing: no one to

blame. Erica Jong

1110 If you don't risk anything, you risk even more. Erica Jong

1109

The biggest cause of trouble in the world today is that the stupid people are so

sure about things and the intelligent folks are so full of doubts. Bertrand Russell

1108 You will run out of money before a guru runs out of indicators. Neil Weintraub

1107 I have no special talents. I am only passionately curious. Albert Einstein

1106 Everyone's entitled to their own opinion, but they're not entitled to their own facts. Donald Rumsfeld

1105

Do not believe in anything simply because you have heard it. Do not believe in

anything simply because it is spoken and rumored by many. Do not believe in

anything simply because it is found written in your religious books. Do not believe

in anything merely on the authority of your teachers and elders. Do not believe in

traditions because they have been handed down for many generations. But after

observation and analysis, when you find that anything agrees with reason, and is

conducive to the good and benefit of one and all, then accept it and live up to it. Siddhartha Gautama

1104

500 fights, that's the number I figured when I was a kid. 500 street fights and you

could consider yourself a legitimate tough guy. You need 'em for experience. To

develop leather skin. So I got started. Of course, along the way you stop thinking

about being tough and all that. It stops being the point. You get past the silliness of

it all. But then, after, you realize that's what you are. Knockaround Guys

1103

If you can preserve your financial and mental capital when others have depleted or

squandered theirs, the long-term rewards will be great. Jack Sparrow

1102

The illiterate of the 21st century will not be those who cannot read and write, but

those who cannot learn, unlearn, and relearn. Alvin Toffler

1101 Reason is the main resource of man in his struggle for survival. Ludwig Von Mises

1100

It may be readily conceived that if men passionately bent upon physical

gratifications desire greatly, they are also easily discouraged; as their ultimate

object is to enjoy, the means to reach that object must be prompt and easy or the

trouble of acquiring the gratification would be greater than the gratification itself.

Their prevailing frame of mind, then, is at once ardent and relaxed, violent and

enervated. Death is often less dreaded by them than perseverance in continuous

efforts to one goal. Alexis de Tocqueville

1099 Fat, drunk and stupid is no way to go through life, son. Animal House

1098

When I started writing I thought if I proved X was a stupid thing to do that people

would stop doing X. I was wrong. Bill James

1097

It seems LTCM could have survived one Nobel prize-winner, but with two, they

were doomed. Frederic Townsend

1096

The success of options valuation is the story of a simple, asymptotically correct

idea, taken more serious than it deserved, and then used extravagantly, with

hubris, as a crutch to human thinking. Emanuel Derman

1095 Success demands singleness of purpose. Vince Lombardi

1094

If all it took to beat the markets was a P.h.D in mathematics, there'd be a hell of a

lot of rich mathematicians out there. Bil Dries

1093

The class of those who have the ability to think their own thoughts is separated by

an unbridgeable gulf from the class of those who cannot. Ludwig Von Mises

1092 It is a capital mistake to theorize before one has data. Sir Arthur Conan Doyle

1091 Losing an illusion makes you wiser than finding a truth. Ludwig Borne

1090

Portfolio structuring, risk management, execution strategies, capital management,

and leverage management may not be directly connected to the algorithm that

generates the buy and sell signals, but they are all hugely important. Bruce Cleland

1089

The mathematics are very important, but it's only one piece of the puzzle. The

most important thing overall is the total investment process, of which the signal

generator is an important part. Bruce Cleland

1088 Measure what is measurable, and make measurable what is not so. Galileo Galilei

1087

The difference between a successful person and others is not a lack of strength,

not a lack of knowledge, but rather a lack of will. Vince Lombardi

1086

Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on

the way up. Keep your eye open at the top. Ed Seykota

1085 Everything flows. Heraclitus

1084 Life is a school of probability. Walter Bagehot

1083

We have made our business managing risk. We are comfortable with risk and we

get our reward from risk. John W. Henry

1082

Since investors are human and make mistakes, they're never 100% sure of their

vision and whether or not their view is correct. So price adjustments take time as

they fluctuate and a new consensus is formed in the face of changing market

conditions and new facts. For some changes this consensus is easy to reach, but

there are other events that take time to formulate a market view. It's those events

that take time that form the basis of our profits. John W. Henry

1081 Man's expectations manifest in trends. John W. Henry

1080 Money management is the true survival key. Bill Dunn

1079 The beginning is the most important part of the work. Plato

1078 Free markets will always find their own means of price discovery. Keith Campbell

1077

Government regulation and intervention have been, are, and will continue to be

present for as long as society needs rules by which to live. Today's governmental

intervention or decree is tomorrow's opportunity. Keith Campbell

1076

The people that I know who are the most successful at trading are passionate

about it. They fulfill what I think is the first requirement: developing intuitions about

something they care about deeply, in this case, trading... They develop a deep

knowledge of whatever form of analysis they use. Out of that passion and

knowledge, their trading ideas, insights, and intuitions emerge. Charles Faulkner

1075

My dear, one can make just as much money from the destruction of a civilization

as from the building of it. Gone With the Wind

1074

There is nothing more difficult to take in hand, more perilous to conduct, or more

uncertain in its success, than to take the lead in the introduction of a new order of

things. Niccolo Machiavelli

1073

Speculation [is] dealing with the uncertain conditions of the unknown future. Every

human action is a speculation in that it is embedded in the flux of time. Ludwig Von Mises

1072

To be aware how fruitful the playful mood can be is to be immune to the

propaganda of the alienated, which extols resentment as a fuel of achievement. Eric Hoffer

1071 Fish see the bait, but not the hook; men see the profit, but not the peril. Chinese proverb

1070

Education rears disciples, imitators, and routinists, not pioneers of new ideas and

creative geniuses. The schools are not nurseries of progress and improvement,

but conservatories of tradition and unvarying modes of thought. Ludwig Von Mises

1069

You have to stop trying to will things to happen in order to prove that you're right.

Listen only to what the market is telling you now. Forget what you thought it was

telling you five minutes ago. The sole objective of trading is not to prove you're

right, but to hear the cash register ring. Marty Schwartz

1068

Trading is a psychological game. Most people think that they're playing against the

market, but the market doesn't care. You're really playing against yourself. Marty Schwartz

1067

If the market gets negative news and the market shrugs it off and it continues to go

up, this is a bullish reaction because it means the market has already discounted

the news. On the other hand, a sign of a fully priced market is one that reacts

poorly to good news. Marty Schwartz

1066

Technical indicators that show me low-risk entry points for high probability trades

are at the core of my methodology. But I am always intensely searching for

patterns, setups, recurring themes, no matter how small, to help further swing the

odds in my favor on a given trade. Marty Schwartz

1065

When I was in the first grade, the teacher asked each of us what we wanted to be

when we grew up. I said, 'a detective.' This investigative nature has carried

through into adulthood. I love searching for clues, synthesizing tons of unrelated

data, and arriving at a logical conclusion. While these observations are not entirely

scientific, they are things I've seen repeatedly over the years. Marty Schwartz

1064

Your trading methodology has to fit your personality. You have to understand your

strengths and your weaknesses. It took me nine years to figure myself out. Marty Schwartz

1063

When you're in a losing position and you're brainlocked, do whatever's necessary

to help clear your head. Whether you're a pro or an amateur, you cannot lose your

objectivity. Marty Schwartz

1062

Wall Street doesn't want to see the emperor naked. He may be old and fat and

flabby, but they don't want to know it. They want to see him regal and royal in all

his majesty. And as long as they see him that way, that's the way he is, because

they keep on buying. Big ball keep on rolling. Marty Schwartz

1061

It behooves those who are genetically predisposed to a bearish position to

remember that markets have a logic of their own. John Mauldin

1060

Don't get in a shootout if you've left your guns at home. The markets are no place

to be trying to impress people. The only way to impress anybody is to stay on your

toes, be consistent, and trade within your means. Marty Schwartz

1059

When you're trading, it's important to have your guns on. You can't be wandering

around the Street unarmed, and if you don't know the terrain, you're going to get

killed. Marty Schwartz

1058

A great trader is like a great athlete. You have to have natural skills, but you have

to train yourself how to use them. Marty Schwartz

1057

You will never be more objective than before you execute a trade. Once you are in

a trade, emotions take over, so your plan must be in place beforehand. Marty Schwartz

1056

Trading must be addressed as a profession, because if you do not treat it as such,

those who do will separate you from your money very quickly. Marty Schwartz

1055 I went to a fight the other day and wound up trading futures in Chicago. Wall Street proverb

1054

The more you lose in a trade, the less objective you become. Exiting a losing trade

quickly clears your head and restores your objectivity. After a breather, you might

put the same trade back on if you can intellectually justify it, but you have to

constantly remind yourself that there's a myriad of opportunities in the

marketplace. By preserving your capital through the use of a stop, you make it

possible to wait patiently for a high-probability trade with a low-risk entry point. Marty Schwartz

1053

A stop automatically takes your brain out of reverse and puts it into neutral. Your

money's not back to neutral, but your mind's back to the point where you can

regroup and try to think up a fresh idea without the pressure of a losing position

hanging over your head. Marty Schwartz

1052

Whenever you have jealousy as an emotion, or greed, or envy, it distorts your

judgment. The market's like the bleached blonde in Vegas. It doesn't care about

you. That's why you have to put aside your ego and get out. If you have trouble

doing that, as most people do, be like Odysseus; tie yourself to the mast with an

automatic stop and take your emotions out of play. Marty Schwartz

1051

What most people fail to understand is that while you're losing your money, you're

also losing your objectivity. It's like being at the craps table in Vegas, and the fat

bleached blonde in the sequined dress is rolling the dice, and you're losing, and

you're determined that you're not going to let her beat you. What you've forgotten

is that she doesn't care about you, she's just rolling the dice. Marty Schwartz

1050

Taking a loss is hard to do because it's an admission that you've been wrong. But

in the market, being wrong some of the time is part of the game. On each trade,

you have to establish your 'uncle point,' the point where you'll get out of a losing

position, and you have to have the mental discipline to pull the trigger at that point. Marty Schwartz

1049 There's no cure for fools. Yojimbo

1048

Confidence is every part of trading. If you're not convinced that you can win, you

should never climb into the ring. Marty Schwartz

1047

For two hundred days a year, I'd end up with reasonably small losses netted out

with similar-sized gains. Lose $5,000 here, make $6,000 there, round after round,

twenty, thirty, forty times a day. But I'd win the other fifty trading days by clear-cut

unanimous decisions. Smack the bonds for $75,000, hit a stock for $100,000, nail

a couple of options for $125,000, pound the S&Ps for $150,000. Over time it made

me a big winner, to the tune of $5 million a year. Marty Schwartz

1046

The most important thing is to protect your trading capital until you can regain your

equilibrium and put all the shadows of the losing streak behind you. Losing streaks

are an unfortunate part of the game, but if you are a good disciplined trader who

can shift into neutral, the losing will end and black ink will start to flow again. Marty Schwartz

1045

When I came back, I'd see a trade I liked and I'd do it small with a very tight stop,

so if I was wrong, I'd get right out. All the time I kept telling myself, make little

profits, make little profits, make little profits. Black ink, black ink, black ink. It's all

psychological. Marty Schwartz

1044

You can never shift from reverse to first gear without going through neutral. You

must change the direction of bad trading by first shifting to neutral. You must stop. Marty Schwartz

1043

The best way to stop a losing streak is to stop! Stop the losses, stop the bleeding.

Take time off and let your intellect take charge of your emotions; the market will be

there when you return. Marty Schwartz

1042

The best way to end a losing streak is to cut your losses and divorce your ego from

the game... You have to manage your resources and not lose too much of your

stake. Many people when they're losing increase their bets; they double up hoping

to win it all back on one roll of the dice. That strategy can be devastating. Marty Schwartz

1041

When you're a market timer, you have to be equally good at going short and going

long, and when the market changes sides, you can't hold your position and hope it

turns around. If you're not a natural like Mickey Mantle, you've got to be a student

of the game like Rod Carew. Practice, practice, practice. Marty Schwartz

1040

Because we make and lose thousands of dollars every day, big-time traders often

give the appearance of treating money with an 'easy come, easy go' attitude.

That's not right. Just because we don't do the mashed potatoes over our wins or

whine about our losses doesn't mean that we take them casually. Marty Schwartz

1039

When you're trading real time, and things start popping, you're challenged to make

immediate decisions. You can't stand still, there's no time to think. It's attack or

retreat, increase the position or get out. Marty Schwartz

1038

That's the basic difference between an investor and a trader. A trader looks at the

market as one living, breathing organism instead of a collection of individual

stocks. Marty Schwartz

1037

The only real security that a man will have in this world is a reserve of knowledge,

experience, and ability. Henry Ford

1036

I've found that people who are great at something are not so much convinced of

their own greatness as mystified at why everyone else seems so incompetent. Paul Graham

1034

Academic assertions that outperformance is impossible pose a useful sort of litmus

test. If one is cowed enough by the dogma to accept mediocrity as inevitable, then

one most likely lacks the drive, the talent or the intellect (or some combination of

the three) to achieve excellence in the first place. Jack Sparrow

1033 Develop a built-in bullshit detector. Ernest Hemingway

1032 Never mistake motion for action. Ernest Hemingway

1031 There is great disorder under heaven... the situation is excellent. Chairman Mao

1030

For the great majority of mankind are satisfied with appearances, as though they

were realities. Niccolo Machiavelli

1029

The enemy advances, we retreat; the enemy camps, we harass; the enemy tires,

we attack; the enemy retreats, we pursue. Chairman Mao

1028

The realization that you are responsible for the results you get is the key to

successful investing. Winners know they are responsible for their results; losers

think they are not. Van Tharp

1027

I'm not saying that controlling your mental state is the magic solution to trading

success. It's just part of the answer. But when you admit that the answer is within

yourself, you've come a long way. Van Tharp

1026

Always respect the marketplace. Never take anything for granted. Do your

homework. Recap the day. Figure out what you did right and what you did wrong.

That is one part of the homework; the other part is projective. What do I want to

happen tomorrow? What happens if the opposite occurs? What happens if nothing

happens? Think through all the 'what-ifs.' Anticipate and plan, rather than react. Tony Saliba

1025

Discipline is number one: Take a theory and stick with it. But you also have to be

open-minded enough to switch tracks if you feel that your theory has been proven

wrong. You have to be able to say, 'My method worked for this type of market, but

we are not in that type of market anymore.' Tony Saliba

1024

How do you lose money? It's either a bad day trading or a losing position. If it's a

bad position that is the problem, then you should just get out of it. Tony Saliba

1023

...the best traders have no ego. To be a great trader, you have to have a big

enough ego only in the sense that you have confidence in yourself. You cannot let

ego get in the way of a trade that is a loser; you have to swallow your pride and get

out. Tom Baldwin

1022

Trading is like any other job. You work hard, put in the time and effort, and make

your own luck. I was lucky that the first 100-lot I sold was a winner. But why was I

lucky? Because I stood there all day for over six months, developing and honing

market feeling. When the opportunity occurred, I didn't hesitate. Tom Baldwin

1021

Most important, losers don't work hard enough. Most people walk in and think

there is a 50/50 chance on any trade. They don't think there is anything more to it

than that. They don't concentrate. They don't watch the factors that affect the

market. You can see it in their eyes; it is almost as if there is a wall in front of their

face. Tom Baldwin

1020 I'm not afraid to lose. When you start being afraid to lose, you're finished. Brian Gelber

1019

Most traders who fail have large egos and can't admit that they are wrong. Even

those who are willing to admit that they are wrong early in their career can't admit it

later on. Also, some traders fail because they are too worried about losing. Brian Gelber

1018

I'm not picky about how I make my money. It doesn't matter if my opinion is right or

wrong. All that matters is whether I make money. Brian Gelber

1017

I know educated people who watch the news and wonder why the hell they lost

money when everyone else is taking profits. The media owes it to the public to

report that the market goes down not only on profit taking, but on a lot of loss

taking as well. Mark Weinstein

1016

You have to learn how to lose; it is more important than learning how to win. If you

think you are always going to be a winner, when you lose, you will develop feelings

of hostility and end up blaming the market instead of trying to learn why you lost. Mark Weinstein

1015

Your strategy has to be flexible enough to change when the environment changes.

The mistake most people make is they keep the same strategy all the time. They

say, 'Damn, the market didn't behave the way I thought it would.' Why should it?

Life and the markets just don't work that way. Mark Weinstein

1014

Don't trade until an opportunity presents itself. Knowing when to stay out of the

markets is as important as knowing when to be in them. Mark Weinstein

1013 Be your own person. Think against the herd, as they must lose in time. Mark Weinstein

1012

Don't be arrogant. When you get arrogant, you forsake risk control. The best

traders are the most humble. Mark Weinstein

1011

Another item I would place under the category of misconceptions is the way the

media reports the reasons for the market being down. They are always saying the

market is down because of profit taking. I think it would be wonderful if everybody

was always taking profits. But, the truth is, most people lose money, and the

reason markets go down is because they take their losses. Mark Weinstein

1010

I don't try to figure out where the market is going before the action; I let the market

tell me where it is going. Also, there is such a variety of technical input in the stock

market... that you will almost always get a signal before the market is about to do

something. Mark Weinstein

1009

I am always looking for a market that is losing momentum, and then go the other

way. Mark Weinstein

1008

When I trade at home, I often watch the sparrows in my garden. When I feed them

bread, they take just a little piece at a time and fly away. They keep on flying back

and forth, taking small bits of bread. They may have to make a hundred stabs at a

piece of bread to get what a pigeon gets at one time, but that is why a pigeon is a

pigeon. You will never be able to shoot a sparrow, it is just too fast. Mark Weinstein

1007

Although the cheetah is the fastest animal in the world and can catch any animal

on the plains, it will wait until it is absolutely sure it can catch its prey. It may hide in

the bush for a week, waiting for just the right moment. It will wait for a baby

antelope, and not just any baby antelope, but preferably one that is also sick or

lame. Only then, when there is no chance it can lose its prey, does it attack. That,

to me, is the epitome of professional trading. Mark Weinstein

1006

Most people will not wait for the environment to tip itself off. They will walk into the

forest when it is still dark, while I wait until it gets light. Mark Weinstein

1005

My fear of the markets has forced me to hone my timing with great precision.

When I am trading properly, it is like a pool player running racks. If my gut feel of

market conditions is not right, I don't trade. Mark Weinstein

1004

I just wait until there is money lying in the corner, and all I have to do is go over

there and pick it up. I do nothing in the meantime. Even people who lose money in

the market say, 'I just lost my money, now I have to do something to make it back.'

No, you don't. You should sit there until you find something. Jim Rogers

1003

I always try to encourage people that are thinking of going into this business for

themselves. I tell them, 'Think that you might become more successful than you

ever dreamt, because that's what happened to me.' Marty Schwartz

1002

I always take my losses quickly. That is probably the key to my success. You can

always put the trade back on, but if you go flat, you see things differently. Marty Schwartz

1001

If you're ever very nervous about a position overnight, and especially over a

weekend, and you're able to get out at a much better price than you thought

possible when the market trades, you're usually better off staying with the position. Marty Schwartz

1000

The most important thing is money management, money management, money

management. Anybody who is successful will tell you the same thing. Marty Schwartz

999

The great thing about being a trader is that you can always do a much better job.

No matter how successful you are, you know how many times you screw up. Most

people, in most careers, are busy trying to cover up their mistakes. As a trader,

you are forced to confront your mistakes because the numbers don't lie. Marty Schwartz

998

After a devastating loss, I always play very small and try to get black ink, black ink.

It's not how much money I make, but just getting my rhythm and confidence back. I

shrink my size totally — to a fifth or a tenth of the position that I trade normally.

And it works. I think I ended up losing only $57,000 in November 1982, after taking

a $600,000 hit on November 4. Marty Schwartz

997

By living the philosophy that my winners are always in front of me, it is not so

painful to take a loss. If I make a mistake, so what! Marty Schwartz

996

Before, admitting I was wrong was more upsetting than losing the money. I used to

try to will things to happen. I figured it out, therefore it can't be wrong. When I

became a winner, I said, 'I figured it out, but if I'm wrong, I'm getting the hell out,

because I want to save my money and go on to the next trade. Marty Schwartz

995

My attitude is that I always want to be better prepared than someone I'm

competing against. The way I prepare myself is by doing my work each night. Marty Schwartz

994

If you try to learn from every single trade that you make, you are only going to get

better and better as time goes on. David Ryan

993

In physics you're playing against God, and he doesn't change his laws very often.

In finance you're playing against God's creatures, agents who value assets based

on their ephemeral opinions. They don't know when they've lost, so they keep

trying. Emanuel Derman

992 You need to be decisive, open-minded, flexible and competitive. Stan Druckenmiller

991 You miss 100% of the shots you don't take. Wayne Gretzky

990

The highest compliment that you can pay me is to say that I work hard every day,

that I never dog it. Wayne Gretzky

989 I skate to where the puck is going to be, not where it has been. Wayne Gretzky

988

The stock market is neither efficient nor random. It is not efficient because there

are too many poorly conceived opinions; it is not random because strong investor

emotions can create trends. William O' Neill

987

High volume at a key point is an extraordinarily valuable tip-off that a stock is ready

to move. Volume can also be used in a reverse manner. When prices enter a

consolidation after an advance, volume should dry up very substantially. In other

words, there should be very little selling coming into the market. During a

consolidation, declining volume is generally constructive. William O' Neill

986

Just as a doctor would be foolish not to use X-rays and EKGs, investors would be

foolish not to use charts. Charts provide valuable information about what is going

on that cannot be obtained easily any other way. They allow you to follow a huge

number of different stocks in an organized manner. William O' Neill

985

Letting losses run is the most serious mistake made by most investors. The public

doesn't really understand the philosophy of cutting losses quickly. William O' Neill

984

The secret for winning in the stock market does not include being right all the time.

In fact, you should be able to win even if you are right only half the time. The key is

to lose the least amount of money possible when you are wrong. William O' Neill

983

My philosophy is that all stocks are bad. There are no good stocks unless they go

up in price. If they go down instead, you have to cut your losses fast. William O' Neill

982

There should be a respect for the person on the other side of the trade. Always ask

yourself: Why does he want to sell? What does he know that I don't? Finally, you

have to be intellectually honest with yourself and others. In my judgment, all great

traders are seekers of truth. Michael Steinhardt

981

Good trading is a peculiar balance between the conviction to follow your ideas and

the flexibility to recognize when you have made a mistake. You need to believe in

something, but at the same time, you are going to be wrong a considerable

number of times. The balance between confidence and humility is best learned

through extensive experience and mistakes. Michael Steinhardt

980

The term professionally managed implies a credit I am not sure I would give the

average professional in this business. Michael Steinhardt

979

One of the allures of this business is that sometimes the greatest ignoramus can

do very well. That is unfortunate because it creates the impression that you don't

necessarily need any professionalism to do well, and that is a great trap. Michael Steinhardt

978

One of the advantages of trading the way I do — being a long-term investor, short-

term trader, individual stock selector, market timer, sector analyst — is that I have

made so many decisions and mistakes that it has made me wise beyond my years

as an investor. Michael Steinhardt

977

There is a very good investor I speak to frequently who said, 'All I bring to the party

is twenty-eight years of mistakes.' I really believe he is right. When you make a

mistake, there is some subconscious phenomenon that makes it less likely for you

to make that same mistake again. Michael Steinhardt

976

We went short Polaroid when it was selling at sixty times earnings, which we

thought was absurd; it then went to seventy times earnings. The market seemed to

lose track of reality, and we found ourselves asking, 'What is the difference

between forty times earnings and eighty times earnings?' By putting a different

number on the secular growth rate estimate, you could justify almost any multiple.

That is how people were thinking in those days. Michael Steinhardt

975

There is a very important difference between being a theoretical contrarian and

dealing with it in practical terms. In order to win as a contrarian, you need the right

timing and you have to put on a position in the appropriate size. If you do it too

small, it's not meaningful; if you do it too big, you can get wiped out if your timing is

slightly off. The process requires courage, commitment, and an understanding of

your own psychology. Michael Steinhardt

974

As soon as a formula is right for any length of time, its own success carries the

weight of its inevitable failure. Michael Steinhardt

973

Good traders know that opportunistic speculation is a process. Ignore any one

single outcome, focus on the methodology that can consistently avoid catastrophic

losses, manage risk, preserve capital. A good process can be replicated, a random

spin of the wheel cannot. Barry Ritholtz

972

Evolution is not a conscious process. It is a winnowing out of the poorly designed

and emergence of the better designed on the basis of the process of natural

selection. In contrast, in finance the process is conscious and intelligent. Richard Bookstaber

971

A better analogy than physics or biology is a military one. The point is that there is

a strategy of intelligent reaction to any action, an arms race to leapfrog one

another in information gathering and technology, to know what others are doing,

and to react in a way that they will not anticipate. This is the point where I could

pull out quotes from The Art of War about seeing into the mind of the enemy,

attacking when your opponent believes you will retreat, and the like. That is not

physics. Richard Bookstaber

970

You can't build in a feedback or reactive model, because you don't know what to

model. And if you do know — by the time you know — the odds are the market has

changed. That is the whole point of what makes a trader successful — he can see

things in ways most others do not, anticipate in ways others cannot, and then

change his behavior when he starts to see others catching on. Richard Bookstaber

969

[Poker is] a very simple game; a five-year-old can learn it. But it's also highly

mathematical. If you never play someone on the next level, you don’t even know

that level exists. It's almost another dimension. Chip Reese

968

I have two basic rules about winning in trading as well as in life: (1) If you don't bet,

you can't win. (2) If you lose all your chips, you can't bet. Larry Hite

967

When I was a kid and got my first motorcycle, I had an older friend who would

always get into fights. He told me, 'Larry, when you are on a motorcycle, never

argue with a car. You will lose.' The same lesson applies to trading: If you argue

with the market, you will lose. Larry Hite

966

There are really four kinds of trades or bets: good bets, bad bets, winning bets,

and losing bets. Most people think that a losing trade was a bad bet. That is

absolutely wrong. You can lose money even on a good bet. If the odds on a bet

are 50/50 and the payoff is $2 versus a $1 risk, that is a good bet even if you lose.

The important point is that if you do enough of those trades or bets, eventually you

have to come out ahead. Larry Hite

965

Risk is a no-fooling-around game; it does not allow for mistakes. If you do not

manage the risk, eventually they will carry you out. Larry Hite

964

I have a friend who has amassed a fortune in excess of $100 million. He taught me

two basic lessons. First, if you never bet your lifestyle, from a trading standpoint,

nothing bad will ever happen to you. Second, if you know what the worst possible

outcome is, it gives you tremendous freedom. The truth is that, while you can't

quantify reward, you can quantify risk. Larry Hite

963

There is a very important message here: People don't change. That is why this

whole game works. Larry Hite

962

I have a friend who is an economist. He would try to explain to me, as if talking to a

child, why what I was trying to do was futile, because 'the markets are efficient.' I

have noticed that everyone who has ever told me that the markets are efficient is

poor. Larry Hite

961

For some reason, the idea of trading on 5 percent margin made perfect sense to

me. Larry Hite

960

I know several people who claim to have market insights during dreams. I think

one of the functions of dreams is to reconcile information and feelings which the

conscious mind finds intractable. Ed Seykota

959

It is a happy coincidence that when nature gives us true burning desires, she also

gives us the means to satisfy them. Those who want to win and lack skill can get

someone with skill to help them. Ed Seykota

958

It's not how close you get to the ground, but how precise can you fly the airplane. If

you feel so careless with your life that you want to be the world's lowest flying

aviator, then you might do it for a while — but then a great many former friends of

mine are no longer with us, simply because they cut their margins too close. Bob Hoover

957 There are few activities so enlightening as to read old books with new eyes. Jack Sparrow

956

Trading is a curious mix of mostly going with the flow, yet knowing when to

selectively fade the flow. Jack Sparrow

955 Being contrarian at the wrong time is akin to arguing with a herd of cattle. Jack Sparrow

954

I think that if people look deeply enough into their trading patterns, they find that,

on balance, including all their goals, they are really getting what they want, even

though they may not understand it or want to admit it. Ed Seykota

953

Win or lose, everybody gets what they want out of the market. Some people like to

lose, so they win by losing money. Ed Seykota

952

Psychology motivates the quality of analysis and puts it to use. Psychology is the

driver and analysis is the road map. Ed Seykota

951

A losing trader can do little to transform himself into a winning trader. A losing

trader is not going to want to transform himself. That's the kind of thing winning

traders do. Ed Seykota

950

[Traders fail] for the same reason that most baby turtles fail to reach maturity:

Many are called and few are chosen. Society works by the attraction of the many.

As they are culled out, the good ones are left, and the others are released to go try

something else until they find their calling. The same is true for other fields of

pursuit. Ed Seykota

949

One alternative [to expensive drama] is to keep bets small and then to

systematically keep reducing risk during equity drawdowns. That way you

approach your safe money asymptotically and have a gentle emotional and

financial touchdown. Ed Seykota

948

The joy of winning and the pain of losing are right up there with the pain of winning

and the joy of losing. Also to consider are the joy and pain of not participating. The

relative strengths of these feelings tend to increase with the distance of the trader

from his commitment to being a trader. Ed Seykota

947

'Luck' or 'smarts' or 'gift' are words indicating an attitudinal proclivity for mastery.

One tends to do well at one's calling. I think most good traders have a little extra

spark about trading. Ed Seykota

946

Luck plays an enormous role in trading success. Some people were lucky enough

to be born smart, while others were even smarter and got born lucky. Ed Seykota

945

Good traders have a special talent for trading just as good musicians and good

athletes have talents for their fields. Great traders are ones who are absorbed by

the talent. They don't have the talent — the talent has them. Ed Seykota

944

Gold tends to be dug up, refined, and then buried again. The geographical entropy

of all gold on the planet seems to decrease over time. A lot has been collected in

vaults. I project the trend as one toward a central world gold stash. Ed Seykota

943

Inflation is part of the way societies sweep away the old order. All currencies

eventually get debased — like it or not. Compute one penny invested at the time of

Christ, compounded at 3 percent per year. Then consider why nobody has

anywhere near that amount these days. Ed Seykota

942

The stock market behaves differently from itself in that easily identifiable patterns

seldom exactly repeat. Ed Seykota

941 A lot of people would rather understand the market than make money. Ed Seykota

940

Common patterns transcend individual market behavior. For example, bond prices

have a lot in common with the way cockroaches crawl up and down a wall.

Unfortunately for cockroach followers, there is usually no one around to take the

other side of a trade. Ed Seykota

939

Experienced traders can be very supportive just by being there for sharing joys

and sorrows. Ed Seykota

938

The markets are the same now as they were five to ten years ago because they

keep changing — just like they did then. Ed Seykota

937

Charting is a little like surfing. You don't have to know a lot about the physics of the

tides, resonance, and fluid dynamics in order to catch a good wave. You just have

to be able to sense when it's happening and then have the drive to act at the right

time. Ed Seykota

936 Be sensitive to the subtle differences between 'intuition' and 'into wishing.' Ed Seykota

935

Gut feel is important. If ignored, it may come out in subtle ways by coloring your

logic. It can be dealt with through meditation and reflection to determine what's

behind it. If it persists, then it might be a valuable subconscious analysis of some

subtle information. Otherwise, it might be a dangerous sublimation of an inner

desire for excitement and not reflect market conditions. Ed Seykota

934

I don't think traders can follow rules very long unless they reflect their own trading

style. Eventually, a breaking point is reached and the trader has to quit or change,

or find a new set of rules he can follow. This seems to be part of the process of

evolution and growth as a trader. Ed Seykota

933

Mostly I follow the rules. As I keep studying the markets, I sometimes find a new

rule which breaks and then replaces a previous rule. Sometimes I get to a personal

breakpoint. When that happens, I get out of the markets altogether and take a

vacation until I feel that I am ready to follow the rules again. Perhaps some day, I

will have a more explicit rule for breaking rules. Ed Seykota

932

I feel my success comes from my love of the markets. I am not a casual trader. It is

my life. I have a passion for trading. It is not merely a hobby or even a career

choice for me. There is no question that this is what I am supposed to do with my

life. Ed Seykota

931 Losing a position is aggravating, whereas losing your nerve is devastating. Ed Seykota

930

I set protective stops at the same time I enter a trade. I normally move these stops

in to lock in a profit as the trend continues. Sometimes, I take profits when a

market gets wild. This usually doesn't get me out any better than waiting for my

stops to close in, but it does cut down on the volatility of the portfolio, which helps

calm my nerves. Ed Seykota

929 I am a self-taught trader who is continually studying both myself and other traders. Ed Seykota

928

Psychologically, I tend to alter my activity depending on performance. I tend to be

more aggressive after I have been winning, and less so after losses. These

tendencies seem OK. In contrast, a costly tendency is to get emotional over a loss

and then try to get even with an overly large position. Ed Seykota

927

The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3)

cutting losses. If you can follow these three rules, you may have a chance. Ed Seykota

926

I prefer not to dwell on past situations. I tend to cut bad trades as soon as possible,

forget them, and then move on to new opportunities. Ed Seykota

925 You mustn't hesitate to dream a little bigger darling. Inception

924

Dramatic and emotional trading experiences tend to be negative. Pride is a great

banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly

after I got emotionally involved with positions. Ed Seykota

923

If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I

turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit.

Being bullish and not being long is illogical. Ed Seykota

922

Fundamentals that you read about typically are useless as the market has already

discounted the price, and I call them 'funny-mentals.' However, if you catch on

early, before others believe, then you might have valuable 'surprise-a-mentals.' Ed Seykota

921

The profitability of trading systems seems to move in cycles. Periods during which

trend-following systems are highly successful will lead to their increased popularity.

As the number of system users increases, and the markets shift from trending to

directionless price action, these systems become unprofitable, and

undercapitalized and inexperienced traders will get shaken out. Longevity is the

key to success. Ed Seykota

920

All trading is done on some sort of system, whether or not it is conscious. Many of

the good systems are based on following trends. Life itself is based on trends.

Birds start south for the winter and keep on going. Companies track trends and

alter their products accordingly. Tiny protozoa move in trends along chemical and

luminescence gradients. Ed Seykota

919

Systems trading is ultimately discretionary. The manager still has to decide how

much risk to accept, which markets to play, and how aggressively to increase and

decrease the trading as a function of equity change. These decisions are quite

important — often more important than trade timing. Ed Seykota

918

Striking a workable ecology seems to promote trading longevity, which is one key

to success. Ed Seykota

917

The key to long-term survival and prosperity has a lot to do with the money

management techniques incorporated into the technical system. There are old

traders and there are bold traders, but there are very few old, bold traders. Ed Seykota

916

Systems don't need to be changed. The trick is for a trader to develop a system

with which he is compatible. Ed Seykota

915

If I can help somebody, fine. That's the whole idea. I feel in my heart that nobody in

this game ever devoted more concentration to the batter's box than Theodore

Samuel Williams, a guy who practiced until the blisters bled, and loved doing it,

and got more delight out of examining by conversation and observation the art of

hitting the ball. If that does not qualify me, nothing will. Ted Williams

914

A sense of humor... is needed armor. Joy in one's heart and some laughter on

one's lips is a sign that the person down deep has a pretty good grasp of life. Hugh Sidey

913

I have always tried to keep the concept of patience in mind by waiting for the right

trade, just like you wait for the percentage hand in poker. Gary Bielfeldt

912

When more of the cards are on the table and you have a very strong hand — in

other words, when you feel the percentages are skewed in your favor — you raise

and play that hand to the hilt. Gary Bielfeldt

911

Most traders have a tendency to take risks that are too large at the beginning.

They tend not to be selective enough about when they take risks. Gary Bielfeldt

910

If a 260-pound fullback is running through the line and a 175-pound linebacker has

to stop him, he has to have the courage to go into him. You need that kind of

courage to be able to participate in the markets. Gary Bielfeldt

909

By having thought out your objective and having a strategy for getting out in case

the market trend changes, you greatly increase the potential for staying with your

winning positions. Gary Bielfeldt

908

The best way I know to learn discipline and patience is to think through a trade

thoroughly before putting it on. You need to develop a plan of your strategies for

various contingencies. That way, you won't get swayed by every news item that

hits the market and causes prices to move up or down. Gary Bielfeldt

907

The most important thing is to have a method for staying with your winners and

getting rid of your losers. Gary Bielfeldt

906

Whenever too many people are doing the same thing, the market will go through a

period of adjustment. Gary Bielfeldt

905

The best thing anyone can do when starting out is to learn how a trend system

works... If you can just learn discipline by using a trend-following system, even

temporarily, it will increase your odds of being a successful trader. Gary Bielfeldt

904

There is nothing worse than a really bad trading day. You feel so low that it is

difficult to hold your head up. But, if I knew that I could also have a similar

experience in the exhilaration of winning, I would take the combination of winning

and losing days any time because you feel that much more alive. Trading gives

you an incredibly intense feeling of what life is all about. Paul Tudor Jones

903

It's not that we had any unfair knowledge that other people didn't have, it is just

that we did our homework. People just don't want to believe that anyone can break

away from the crowd and rise above mediocrity. Paul Tudor Jones

902

The trading experience is so intense that there is a natural tendency to want to

avoid thinking about it once the day is over. I am that way when things are

working. But, when they are not, it spurs me to want to think about what I'm doing

and how I might do better. When things go bad, traders shouldn't stick their heads

in the sand and just hope it gets better. Richard Dennis

901

On any individual trade it is almost all luck. It is just a matter of statistics. If you

take something that has a 53 percent chance of working each time, over the long

run there is a 100 percent chance of it working. Richard Dennis

900

I always say that you could publish trading rules in the newspaper and no one

would follow them. The key is consistency and discipline. Richard Dennis

899

...so many people would make incredibly bad trades just to take a profit. They

would get out even though the market was locked limit-up and almost sure to go

up the next day. They couldn't stand the profits burning a hole in their pocket. Richard Dennis

898 When you are getting beat to death, get your head out of the mixer. Richard Dennis

897

There are a lot of people who get imprinted like ducks. You can teach them that a

warship is their mother if you get them young enough. For a lot of traders, it

doesn't matter so much whether their first big trade is successful or not, but

whether their first big profit is on the long or short side. Those people tend to be

perennial bulls or bears, and that is very bad. Both sides have to be equally OK. Richard Dennis

896

What you can't afford to do is throw away your capital on suboptimal trades. If you

do, you will be too debilitated to trade when the right position comes along. Even if

you put the trade on, it will be relatively small because your capital will have been

depleted by the other trades. Richard Dennis

895

After all is said and done, you have to minimize your losses and try to preserve

capital for those few instances when you can make a lot in a very short period of

time. Richard Dennis

894

If there is one thing that is singularly responsible for the abysmal returns of the

S&P 500... it is the ludicrous set of valuation 'models' that Wall Street has

repeatedly foisted onto an uninformed public in order to sell them on the notion

that dangerously overvalued markets were actually 'cheap.' Knowledge is your

best defense. Valuation matters. John Hussman

893

In the absence of historical evidence, people can say anything they want without

accountability. John Hussman

892

It's not always obvious to the listener when an analyst's argument is full of holes,

but you should always be on red alert when a single year of earnings is taken, at

face value, as the basis for market valuation. John Hussman

891

Life is a race. Death is the finish line. The objective is to go out with the highest

score possible — not in terms of dollars earned or battles won, but a life most fully

lived. Jack Sparrow

890

...because of the complexity of defining interacting and changing market patterns,

a good trader will usually be able to outperform a good system. Paul Tudor Jones

889

When you get a range expansion, the market is sending you a very loud, clear

signal that the market is getting ready to move in the direction of that expansion. Paul Tudor Jones

888

Maybe there are macroeconomic forces at work that are part of a larger super

cycle that we don't have any control over. Perhaps we are simply responding to the

same type of cycles that most advanced civilizations fell prey to, whether it was the

Romans, sixteenth-century Spain, eighteenth-century France, or nineteenth-

century Britain. Paul Tudor Jones

887

I know from studying history that credit eventually kills all great societies. We have

essentially taken out our American Express card and said we are going to have a

great time. Paul Tudor Jones

886

Everything gets destroyed a hundred times faster than it is built up. It takes one

day to tear down something that might have taken ten years to build. Paul Tudor Jones

885 I never apologize to anybody, because I don't get paid unless I win. Paul Tudor Jones

884

[No loyalty to positions] is important because it gives you a wide open intellectual

horizon to figure out what is really happening. It allows you to come in with a

completely clean slate in choosing the correct forecast for that particular market. Paul Tudor Jones

883

I try to avoid any emotional attachment to a market. I avoid letting my trading

opinions be influenced by comments I may have made on the record about a

market. Paul Tudor Jones

882

I think one of my strengths is that I view anything that has happened up to the

present point in time as history. I really don't care about the mistake I made three

seconds ago in the market. What I care about is what I am going to do from the

next moment on. Paul Tudor Jones

881

If I go into the market at just the right moment, by giving it a little gas on the upside,

I can create the illusion of a bull market. But, unless the market is really sound, the

second I stop buying, the price is going to come right down. Paul Tudor Jones

880

Everyone says you get killed trying to pick tops and bottoms and you make all the

money by catching the trends in the middle... I have often been missing the meat

in the middle, but I have caught a lot of bottoms and tops. Paul Tudor Jones

879

I consider myself a premier market opportunist. That means I develop an idea on

the market and pursue it from a very low-risk standpoint until I have repeatedly

been proven wrong, or until I change my viewpoint. Paul Tudor Jones

878

I have very strong views of the long-run direction of all markets. I also have a very

short-term horizon for pain. Paul Tudor Jones

877

I know that to be successful, I have to be frightened. My biggest hits have always

come after I have had a great period and I started to think that I knew something. Paul Tudor Jones

876

The idea that you can't beat the markets is a frightening prospect. That is why my

guiding trading philosophy is playing great defense. If you make a good trade,

don't think it is because you have some uncanny foresight. Always maintain your

sense of confidence, but keep it in check. Paul Tudor Jones

875

When I am trading poorly, I keep reducing my position size. That way, I will be

trading my smallest position size when my trading is worst. Paul Tudor Jones

874 Risk control is the most important thing in trading. Paul Tudor Jones

873

All the trades I have on are interrelated. I look at it in terms of what my equity is

each morning. My goal is to finish each day with more than I started. Paul Tudor Jones

872 I have a mental stop. If it hits that number, I am out no matter what. Paul Tudor Jones

871

Now I spend my day trying to make myself as happy and relaxed as I can be. If I

have positions going against me, I get right out; if they are going for me, I keep

them. Paul Tudor Jones

870

That was when I first decided I had to learn discipline and money management. It

was a cathartic experience for me, in the sense that I went to the edge, questioned

my very ability as a trader, and decided that I was not going to quit. I was

determined to come back and fight. I decided that I was going to become very

disciplined and businesslike about my trading. Paul Tudor Jones

869 First of all, never play macho man with the market. Second, never overtrade. Paul Tudor Jones

868

Tullis taught me about moving volume. When you are trading size, you have to get

out when the market lets you out, not when you want to get out. He taught me that

if you want to move a large position, you don't wait until the market is in new high

or low ground because very little volume may trade there if it is a turning point. Paul Tudor Jones

867

[Eli Tullis] was the toughest son of a bitch I ever knew. He taught me that trading is

very competitive and you have to be able to handle getting your butt kicked. No

matter how you cut it, there are enormous emotional ups and downs involved. Paul Tudor Jones

866

The one thing I learned from Eli [Tullis] is that, ultimately, the market is going to go

where it is going to go. Paul Tudor Jones

865

Learn from your mistakes. Don't be misled by the day-to-day fluctuations in your

equity. Focus on whether what you are doing is right, not on the random nature of

any single trade's outcome. Richard Dennis

864

The [Keynesian] theory is fine, it just doesn't work in the real world. Therefore, we

shouldn't use it. Richard Dennis

863

Trading to me is like betting on independent rolls of the dice that you think are

loaded a little bit in your favor, because you know some statistical things about the

market. Richard Dennis

862

It is a little bit like playing golf: You can throw your clubs around after making a bad

shot, but while you are making the next shot you keep your head down and your

eye on the ball. Richard Dennis

861

Being a trader is like being a boxer. Every now and then, the market gives you a

good wallop. Richard Dennis

860

There is no way to play just one side of that street. If you feel too good when things

are going well, then inevitably you will feel too bad when they are going poorly. I

wouldn't claim that I realized that after three years of trading, but after you've done

it for about twenty years, it either drives you crazy, or you learn to put it into

perspective. Richard Dennis

859

You have to maintain your perspective. There is more to life than trading. Also, to

me, being emotionally deflated would mean lacking confidence in what I am doing.

I avoid that because I have always felt that it is misleading to focus on short-term

results. Richard Dennis

858

It is totally counter productive to get wrapped up in the results. Trading decisions

should be made as unemotionally as possible. Richard Dennis

857

The correct approach is to say: This structure means up, and this structure means

up no more, but never that this structure means up this much and no more. Richard Dennis

856

If there is any lesson I have learned... it is that the unexpected and the impossible

happen every now and then. Richard Dennis

855

You should expect the unexpected in this business; expect the extreme. Don't

think in terms of boundaries that limit what the market might do. Richard Dennis

854

The idea that one side of the market is more likely to work in the absence of

anything else is an illusion. The market just wouldn't be here if that was true. Richard Dennis

853

My experience with novice traders is that they trade three to five times too big.

They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2

percent risks. Bruce Kovner

852

Whenever a trader says 'I wish,' or 'I hope,' he is engaging in a destructive way of

thinking because it takes attention away from the diagnostic process. Bruce Kovner

851

A common mistake is to think of the market as a personal nemesis. The market, of

course, is totally impersonal; it doesn't care whether you make money or not. Bruce Kovner

850

I would say that risk management is the most important thing to be well

understood. Undertrade, undertrade, undertrade is my second piece of advice.

Whatever you think your position ought to be, cut it at least in half. Bruce Kovner

849

As an alternative approach, one of the traders I know does very well in the stock

index markets by trying to figure out how the stock market can hurt the most

traders. It seems to work for him. Bruce Kovner

848

The stock market has far more short-term countertrends. After the market has

gone up, it always wants to come down. The commodity markets are driven by

supply and demand for physical goods; if there is a true shortage, prices will tend

to keep trending higher. Bruce Kovner

847

Nowadays, everybody is a chartist, and there are a huge number of technical

trading systems. I think that change has made it much harder for the technical

trader. Bruce Kovner

846 The general rule is: The less observed, the better the trade. Bruce Kovner

845

Through bitter experience, I have learned that a mistake in position correlation is

the root of some of the most serious problems in trading. If you have eight highly

correlated positions, then you are really trading one position that is eight times as

large. Bruce Kovner

844

What I am really looking for is a consensus that the market is not confirming. I like

to know that there are a lot of people who are going to be wrong. Bruce Kovner

843

When you are really involved, the screen almost reaches out and grabs you. The

way the quotes are made changes: They get wider, they get wilder. I have contacts

all over the world in each of these markets and I know what is going on. It is a

tremendously exciting game. Bruce Kovner

842

One of the jobs of a good trader is to imagine alternative scenarios. I try to form

many different mental pictures of what the world should be like and wait for one of

them to be confirmed. You keep trying them on one at a time. Inevitably, most of

these pictures will turn out to be wrong — that is, only a few elements of the

picture may prove correct. But then, all of a sudden, you will find in that one

picture, nine out of ten elements click. That scenario then becomes your image of

the world reality. Bruce Kovner

841

[The] principle characteristic of a bear market is very sharp down movements

followed by quick retracements... In a bear market, you have to use sharp

countertrend rallies to enter positions. Bruce Kovner

840

The only thing that disturbs me is poor money management. Every so often, I take

a loss that is significantly too large. But I never had a lot of difficulty with the

process of losing money, as long as losses were the outcome of sound trading

techniques. Bruce Kovner

839

The emotional burden of trading is substantial; on any given day, I could lose

millions of dollars. If you personalize these losses, you can't trade. Bruce Kovner

838

...the point about a technical barrier — and I've studied the technical aspects of the

market for a long time — is that the market shouldn't go there if you are right. Bruce Kovner

837

Whenever I enter a position, I have a predetermined stop. That is the only way I

can sleep. I know where I'm getting out before I get in. The position size on a trade

is determined by the stop, and the stop is determined on a technical basis. Bruce Kovner

836

The more a price pattern is observed by speculators, the more prone you are to

have false signals. The more a market is the product of nonspeculative activity, the

greater the significance of technical breakouts. Bruce Kovner

835

The Heisenberg principle in physics provides an analogy for the markets. If

something is closely observed, the odds are it is going to be altered in the process. Bruce Kovner

834

Tight congestions in which a breakout occurs for reasons that nobody understands

are usually good risk-reward trades. Bruce Kovner

833

...as a trader who has seen a great deal and been in a lot of markets, there is

nothing disconcerting to me about a price move out of a trading range that nobody

understands. Bruce Kovner

832

It is very important for me to study the details of price action to see if I can observe

something about how everybody is voting. Studying the charts is absolutely critical

and alerts me to existing disequilibria and potential changes. Bruce Kovner

831

Technical analysis reflects the vote of the entire marketplace and, therefore, does

pick up unusual behavior. By definition, anything that creates a new chart pattern

is something unusual. Bruce Kovner

830

For me, technical analysis is like a thermometer. Fundamentalists who say they

are not going to pay attention to the charts are like a doctor who says he's not

going to take a patient's temperature. But, of course, that would be sheer folly. If

you are a responsible participant in the market, you always want to know where

the market is — whether it is hot and excitable, or cold and stagnant. You want to

know everything you can about the market to give you an edge. Bruce Kovner

829

There is a great deal of hype attached to technical analysis by some technicians

who claim that it predicts the future. Technical analysis tracks the past; it does not

predict the future. You have to use your own intelligence to draw conclusions

about what the past activity of some traders may say about the future activity of

other traders. Bruce Kovner

828

Technical analysis, I think, has a great deal that is right and a great deal that is

mumbo jumbo. Bruce Kovner

827 The market usually leads because there are people who know more than you do. Bruce Kovner

826

I almost always trade on a market view; I don't trade simply on technical

information. I use technical analysis a great deal and it is terrific, but I can't hold a

position unless I understand why the market should move. Bruce Kovner

825

[Successful traders] are strong, independent, and contrary in the extreme. They

are able to take positions others are unwilling to take. They are disciplined enough

to take the right size positions. Bruce Kovner

824

I'm not sure one can really define why some traders make it, while others do not.

For myself, I can think of two important elements. First, I have the ability to imagine

configurations of the world different from today and really believe it can happen...

Second, I stay rational and disciplined under pressure. Bruce Kovner

823

[Michael Marcus] also taught me one other thing that is absolutely critical: You

have to be willing to make mistakes regularly; there is nothing wrong with it. [He]

taught me about making your best judgment, being wrong, making your next best

judgment, being wrong, making your third best judgment, and then doubling your

money. Bruce Kovner

822

Michael [Marcus] taught me one thing that was incredibly important... He taught

me that you could make a million dollars. He showed me that if you applied

yourself, great things could happen. It is very easy to miss the point that you really

can do it. He showed me that if you take a position and use discipline, you can

actually make it. Bruce Kovner

821

The first rule of trading — there are probably many first rules — is don't get caught

in a situation in which you can lose a great deal of money for reasons you don't

understand. Bruce Kovner

820

To this day, when something happens to disturb my emotional equilibrium and my

sense of what the world is like, I close out all positions related to that event. Bruce Kovner

819

I look for confirmation from the chart, the fundamentals, and the market action. I

think you can trade anything in the world that way. Michael Marcus

818

I am very open-minded. I am willing to take in information that is difficult to accept

emotionally, but which I still recognize to be true. Michael Marcus

817

I think that, in the end, losing begets losing. When you start losing, it touches off

negative elements in your psychology; it leads to pessimism. Michael Marcus

816

If trading is your life, it is a torturous kind of excitement. But if you are keeping your

life in balance, then it is fun. All the successful traders I've seen that lasted in the

business sooner or later got to that point. They have a balanced life; they have fun

outside of trading. Michael Marcus

815

Gut feel is very important. I don't know of any great professional trader that doesn't

have it. Being a successful trader also takes courage: the courage to try, the

courage to fail, the courage to succeed, and the courage to keep on going when

the going gets tough. Michael Marcus

814

You need to be aware that the world is very sophisticated and always ask yourself:

'How many people are left to act on this particular idea?' You have to consider

whether the market has already discounted your idea. Michael Marcus

813

When I talk to other traders, I try to keep very conscious of the idea that I have to

listen to myself. I try to take their information without getting overly influenced by

their opinion. Michael Marcus

812

In the final analysis, you need to have the courage to hold the position and take

the risk. Michael Marcus

811

Every trader has strengths and weaknesses. Some are good holders of winners,

but may hold their losers a little too long. Others may cut their winners a little short,

but are quick to take their losses. As long as you stick to your own style, you get

the good and bad in your own approach. Michael Marcus

810

Perhaps the most important rule is to hold on to your winners and cut your losers.

Both are equally important. If you don't stay with your winners, you are not going to

be able to pay for the losers. Michael Marcus

809

If you become unsure about a position, and you don't know what to do, just get out.

You can always come back in. When in doubt, get out and get a good night's

sleep. I've done that lots of times and the next day everything was clear. Michael Marcus

808

Another thing is that if a position doesn't feel right as soon as you put it on, don't

be embarrassed to change your mind and get right out. Michael Marcus

807

I think to be in the upper echelon of successful traders requires an innate skill, a

gift. It's just like being a great violinist. But to be a competent trader and make

money is a skill you can learn. Michael Marcus

806

...it hurt to realize what a fool I had been, but I have learned not to be as attached

to material things. I accepted it as a life lesson. I learned I don't have to own a

house in every beautiful place in the world; I can stay at a hotel and walk on the

beach or climb a trail there. Or, if I really feel like spoiling myself, I can charter a

plane; I don't have to own one. Michael Marcus

805

The best trades are the ones in which you have all three things going for you:

fundamentals, technicals, and market tone. First, the fundamentals should suggest

that there is an imbalance of supply and demand, which could result in a major

move. Second, the chart must show that the market is moving in the direction that

the fundamentals suggest. Third, when news comes out, the market should act in

a way that reflects the right psychological tone. Michael Marcus

804

My trading in those days was a little bit like being a surfer. I was trying to hit the

crest of the wave just at the right moment. But if it didn't work, I just got out. I was

getting a shot at making several hundred points and hardly risking anything. I later

used that surfing technique as a desk trader. Michael Marcus

803

At key intraday chart points, I could take much larger positions than I could afford

to hold, and if it didn't work immediately, I would get out quickly. For example, at a

critical intraday point, I would take a twenty-contract position, instead of the three

to five contracts I could afford to hold, using an extremely close stop. The market

either took off and ran, or I was out. Michael Marcus

802

I would sometimes think that maybe I ought to stop trading because it was very

painful to keep losing. In 'Fiddler on the Roof,' there is a scene where the lead

looks up and talks to God. I would look up and say, 'Am I really that stupid?' And I

seemed to hear a clear answer saying, 'No, you are not stupid. You just have to

keep at it.' So I did. Michael Marcus

801

Trading provides one of the last great frontiers of opportunity in our economy. It is

one of the very few ways in which an individual can start with a relatively small

bankroll and actually become a multi-millionaire. Jack Schwager

799 Nuts!

General Anthony

McAuliffe

798 And remember — wherever you go, there you are. Confucius

797

All truths are easy to understand once they are discovered — the point is to

discover them. Galileo Galilei

796

The great questions of the time will not be resolved by speeches and majority

decisions — that was the great mistake of 1848 and 1849 — but by iron and blood. Otto von Bismarck

795

No two ideals were ever more incompatible than the security of conformity and the

freedom of individuality. After the choice is made, the rest is easy — unless you

don't have the guts to stick by your choice. Hunter S. Thompson

794

Beware of looking for goals: look for a way of life. Decide how you want to live and

then see what you can do to make a living WITHIN that way of life. Hunter S. Thompson

793

To let another man define your own goals is to give up one of the most meaningful

aspects of life — the definitive act of will which makes a man an individual. Hunter S. Thompson

792

Play your own game, be your own man, and don't ask anybody for a stamp of

approval. Hunter S. Thompson

791

Most people's lives are virtual monuments to cowardly indecision. Ah, that we lack

the courage of our romantic convictions; and thereby miss the wine of life, forgoing

the very thing that makes living worthwhile. Hunter S. Thompson

790

The reason that 'guru' is such a popular word is because 'charlatan' is so hard to

spell. William J. Bernstein

789 Winning is habit. Unfortunately, so is losing. Vince Lombardi

788 I am not a man, I am dynamite. Friedrich Nietzsche

787

He who asks fortune-tellers the future unwittingly forfeits an inner intimation of

coming events that is a thousand times more exact than anything they may say. Walter Benjamin

786

In their beginnings it is we who guide affairs and hold them in our power; but so

often once they are set in motion, it is they which guide us and sweep us along. Michel de Montaigne

785

There are very few men — and they are the exceptions — who are able to think

and feel beyond the present moment. Carl von Clausewitz

784

What the best may have, above all, is a capacity to learn and change — and to do

so faster than everyone else. Atul Gawande

783 When your outgo exceeds your income, your upkeep becomes your downfall. unknown

782

In the face of uncertainty, wisdom is to err on the side of pushing, to not give up.

But you have to be ready to recognize when pushing is only ego, only weakness.

You have to be ready to recognize when the pushing can turn to harm. Atul Gawande

781

Thinking… is no more and no less an organ of perception than the eye or ear. Just

as the eye perceives colors and the ear sounds, so thinking perceives ideas. Rudolph Steiner

780

We must eradicate from the soul all fear and terror of what comes toward us out of

the future. We must acquire serenity in all feelings and sensation about the future.

We must look forward with absolute equanimity to everything that may come. Rudolph Steiner

779 Men willingly believe what they wish. Julius Caesar

778 Things change... You know, that's it in a nutshell. Mark Mobius

777

Economic history is a never-ending series of episodes based on falsehoods and

lies, not truths. It represents the path to big money. The object is to recognize the

trend whose premise is false, ride that trend, and step off before it is discredited. George Soros

776

Discipline is hard — harder than trustworthiness and skill... We are by nature

flawed and inconstant creatures. We can't even keep from snacking between

meals. We are not built for discipline. We are built for novelty and excitement, not

for careful attention to detail. Discipline is something we have to work at. Atul Gawande

775 If you're going to bet the farm, you'd better have two farms. Wall Street proverb

774

We typically trade our beliefs about the market and once we've made up our minds

about those beliefs, we're not likely to change them. And when we play the

markets, we assume that we are considering all of the available information.

Instead, our beliefs, through selective perception, may have eliminated the most

useful information. Van Tharp

773 Nothing endures but change. Heraclitus

772 All is flux, nothing stays still. Heraclitus

771 Pete, it's a fool that looks for logic in the chambers of the human heart. Ulysses Everett McGill

770

Forget about this idea of 'grinding out a day's pay.' If you want to make a day's pay

at the races, get a job watering horses, or pitching manure into trucks. Robert L. Bacon

769

When national debts have once been accumulated to a certain degree, there is

scarce, I believe, a single instance of their having been fairly and completely paid. Adam Smith

768 Everyone ought to be rich.

John J. Raskob,

Ladies Home Journal,

1929

767

Sophisticated institutions use complex, computer-driven models, but it remains far

from clear that their results are better than those achieved using a simplified

approach. Lack of discipline and a strong tendency of most people to feel more

comfortable running with the herd are the real enemies of good investment

performance, not the lack of complex models. Tony Boekh

766 The greatest enemy of a good plan is the dream of a perfect plan. Carl von Clausewitz

765

The economy never has been a mechanical phenomenon, nor will it ever be. It is

not like a pendulum or the orbiting of bodies in the solar system. Changes in

technology, innovation, economic structure, regulations, financial institutions, and

social and political attitudes are ongoing and an essential part of the flow. The

economy is subject to all these and many more interconnected influences. Tony Boekh

764

The mutuel take and the breakage add up to a percentage that continually grinds

and chisels the betting money... The grind privileges are spoken for and taken, so

the professional bettor must speculate. Robert L. Bacon

763 You Must Speculate — You CAN'T GRIND! Robert L. Bacon

762

To beat the percentage of the mutuels, the player must ALWAYS have an overlay.

He must always have an extra percentage in his favor, to counteract the 'take'

percentage. Robert L. Bacon

761

Fortune favors the speculator over the grinder because of the plain old arithmetical

percentages. The speculator has a percentage chance to win. The grinder has no

chance. Robert L. Bacon

760

The mutuel grinding only goes one way — against the bettor. But any percentage

can be overcome by enough winners at fat enough prices! Robert L. Bacon

759

The player at the races can't grind or chisel because [that girl] is taken. The

racetrack has all grind and chisel privileges! Robert L. Bacon

758

But there is no use kidding: The professionals keep out of switches by waiting for

the sound overlay spots. They don't play the bad races at both ends of the daily

programs. They don\'t play bad races -- period! When they feel the least bit of

doubt, they walk away from the mutuel windows and step into the bar for a

leisurely drink that will last until a better spot comes along. Robert L. Bacon

757

Any system is better than no system at all. But, of course, we are not studying here

to play any senseless systems or methods. Robert L. Bacon

756

The amateurs who play so carelessly and who fall into all the wrong switches do

not stop to consider the percentages of their rightful losses. When an amateur

goes to the track and loses nine bets (eight races and a daily double) and loses all

his capital for the day, he has lost many times what the percentage calls for. He

has no right to lose so much. It's almost as if he did it on purpose! Robert L. Bacon

755

If the average player — the public play — kept out of all these switches and traps,

then the powers-than-be would have to make the game far more complicated in

order to insure the fact that the majority of players continue to lose and thus

continue to furnish money to keep up the game. Robert L. Bacon

754

[Horse] Racing is simple. Everything about the game is logical and common sense

and elementary. All the figures and the mathematics and the mechanics of racing

can be understood by a child in junior-high school. But the game is decked out in

an endless number of minor contradictions and open switches and deadfall traps,

in order to lure the average player into doing everything wrong. Robert L. Bacon

753

Some amateur players carry inconsistency to such a degree that they demand

consistency from the horses, while at the same time being utterly inconsistent in

their methods of play. It's not the races that beat these players — it's the switches! Robert L. Bacon

752 The public can never catch up to the form — or the game ceases. Robert L. Bacon

751

The principle of ever-changing trends works to force quick and drastic changes of

results sequences when the public happens to get wise to a winning idea. Robert L. Bacon

750

There is no danger of the public ever finding any key to the secret of winning. The

crazy gambling urge and speculative hysteria that overcomes most players at the

track makes that fact a certainty. But, if the public play ever did get wise to the

facts of life, the principle of ever-changing cycles of results would move the form

away from the public immediately. Robert L. Bacon

749

The beginner plunges ahead on a favorite that loses, then bets lightly on a fair-

priced horse that wins. He keeps switching amounts and positions, so that he

never has a worthwhile bet on a winner at a worthwhile price. He is always one

race behind the form of a horse and several races behind the rhythm of the results

sequences. Robert L. Bacon

748

Few players take into consideration the principle of ever-changing cycles of

results. The would-be professional player must always understand that the form

moves away from the public's knowledge. Robert L. Bacon

747 If money be not thy servant, it will be thy master. Francis Bacon

746 Money is a terrible master but an excellent servant. P.T. Barnum

745

When the government produces one quantity of the public good, money, the public

will proceed to make more, just as lawyers find new loopholes in tax laws as fast

as legislation closes up old ones.

Charles P.

Kindleberger

744 John Bull can stand many things, but he cannot stand 2 percent. Walter Bagehot

743

Manias and bubbles are an integral part of the Age of Inflation because they are

caused by too much money and credit. Tony Boekh

742

There have probably been more financial manias in the past 50 years than in any

other period in history. More recent experience shows that they seem to be getting

more extreme, as are the nasty consequences. Tony Boekh

741

One thing is certain, that at particular times a great deal of stupid people have a

great deal of stupid money... At intervals, the money of these people — the blind

capital, as we call it, of a country, is particularly large and craving; it seeks for

someone to devour it, and there is a 'plethora'; it finds someone, and there is

speculation; it is devoured, and there is 'panic'. Walter Bagehot

740

But perhaps what separated us more than all else was that they were of the land,

while I belonged to the sea. Henry de Monfreid

739

How could men whose every instinct held them to the warmth and motion of the

herd, understand that just as instinctively I preferred solitude — solitude peopled

with the ever-changing moods of the elements? Henry de Monfreid

738

For eighteen years I followed the sea, took what it offered. It has brought me

shipwreck and success, sorrow, danger, and unutterable happiness. Henry de Monfreid

737

...the way most fortunes are lost is not through excessive expenditure, but through

bad investments. Paul Graham

736

We delighted in forcing bigger, slower competitors to follow us over difficult ground.

Like guerillas, startups prefer the difficult terrain of the mountains, where the troops

of the central government can't follow. Paul Graham

735

The larger a group, the closer its average member will be to the average for the

population as a whole. So all other things being equal, a very able person in a big

company is probably getting a bad deal, because his performance is dragged

down by the overall lower performance of the others. Paul Graham

734

A big company is like a giant galley driven by a thousand rowers. Two things keep

the speed of the galley down. One is that individual rowers don't see any result

from working harder. The other is that, in a group of a thousand people, the

average rower is likely to be pretty average. Paul Graham

733

If you're in a job that feels safe, you are not going to get rich, because if there is no

danger there is almost certainly no leverage. Paul Graham

732

To get rich you need to get yourself in a situation with two things, measurement

and leverage. You need to be in a position where your performance can be

measured, or there is no way to get paid more by doing more. And you have to

have leverage, in the sense that the decisions you make have a big effect. Paul Graham

730

The movie will begin in five moments, the mindless voice announced. All those

unseated will await the next show. Jim Morrison

729

If you can dream — and not make dreams your master; If you can think — and not

make thoughts your aim; If you can meet with Triumph and Disaster; And treat

those two impostors just the same... Rudyard Kipling

728

Financial commentators who don't actually invest are like sex therapists who don't

have sex. Jack Sparrow

727

As a military force has no constant formation, water has no constant shape: the

ability to gain victory by changing and adapting according to the opponent is called

genius. Sun Tzu

725 Therefore victory in war is not repetitious, but adapts its form endlessly. Sun Tzu

724

Everyone knows the form by which I am victorious, but no one knows the form by

which I ensure victory. Sun Tzu

723

When you are concentrated into one while the opponent is divided into ten, you are

attacking at a concentration of ten to one, so you outnumber the opponent. Sun Tzu

722

To advance irresistibly, push through their gaps. To retreat elusively, outspeed

them. Sun Tzu

721 Be extremely subtle, even to the point of formlessness. Sun Tzu

720

To unfailingly take what you attack, attack where there is no defense. For

unfailingly secure defense, defend where there is no attack. Sun Tzu

719 Appear where they cannot go, head for where they least expect you. Sun Tzu

718

So when opponents are at ease, it is possible to tire them. When they are well fed,

it is possible to starve them. When they are at rest, it is possible to move them. Sun Tzu

717

What causes opponents to come of their own accord is the prospect of gain. What

discourages opponents from coming is the prospect of harm. Sun Tzu

716 Therefore good warriors cause others to come to them, and do not go to others. Sun Tzu

715

Those who are first on the battlefield and await the opponents are at ease; those

who are last on the battlefield and head into battle get worn out. Sun Tzu

714

The thing to do is watch the market, read the tape to determine the limits of the get-

nowhere prices, and make up your mind that you will not take an interest until the

price breaks through the limit in either direction.

Reminiscences of a

Stock Operator

713 The future's uncertain and the end is always near... Jim Morrison

712

The average American is from Missouri everywhere and at all times except when

he goes to the brokers' offices and looks at the tape... He will risk half his fortune in

the stock market with less reflection than he devotes to the selection of a medium-

priced automobile.

Reminiscences of a

Stock Operator

711

For purposes of easy explanation we will say that prices, like everything else,

move along the line of least resistance. They will do whatever comes easiest,

therefore they will go up if there is less resistance to an advance than to a decline;

and vice versa.

Reminiscences of a

Stock Operator

710

The trend is evident to a man who has an open mind and reasonably clear sight,

for it is never wise for a speculator to fit his facts to his theories. Such a man will,

or ought to, know whether it is a bull or a bear market, and if he knows that he

knows whether to buy or to sell.

Reminiscences of a

Stock Operator

709

A man ought not to be led into trading by tokens. He should wait until the tape tells

him that the time is ripe.

Reminiscences of a

Stock Operator

708

And right here I will say that, though I do not give it as a mathematical certainty or

as an axiom of speculation, my experience has been that accidents — that is, the

unexpected or unforeseen — have always helped me in my market position

whenever the latter has been based upon my determination of the line of least

resistance.

Reminiscences of a

Stock Operator

707

...any important piece of news given out between the closing of one market and

the opening of another is usually in harmony with the line of least resistance. The

trend has been established before the news is published, and in bull markets bear

items are ignored and bull news exaggerated, and vice versa.

Reminiscences of a

Stock Operator

706

It sounds very easy to say that all you have to do is to watch the tape, establish

your resistance points and be ready to trade along the line of least resistance as

soon as you have determined it. But in actual practice a man has to guard against

many things, and most of all against himself — that is, against human nature.

Reminiscences of a

Stock Operator

705

When a man makes his play in a commodity market he must not permit himself set

opinions. He must have an open mind and flexibility. It is not wise to disregard the

message of the tape, no matter what your opinion of crop conditions or of the

probable demand may be.

Reminiscences of a

Stock Operator

704

In a narrow market, when prices are not getting anywhere to speak of but move

within a narrow range, there is no sense in trying to anticipate what the next big

movement is going to be — up or down.

Reminiscences of a

Stock Operator

703

It would not be so difficult to make money if a trader always stuck to his

speculative guns — that is, waited for the line of least resistance to define itself

and began buying only when the tape said up or selling only when it said down.

Reminiscences of a

Stock Operator

702

After the real movement started, how long would it take to make up the fifty

thousand dollars I had dropped in order to make sure that I began to load up at

exactly the right time? No time at all! It always pays a man to be right at the right

time.

Reminiscences of a

Stock Operator

701

The weaknesses that all men are prone to are fatal to success in speculation —

usually those very weaknesses that make him likable to his fellows or that he

himself particularly guards against in those other ventures of his where they are

not nearly so dangerous as when he is trading in stocks or commodities.

Reminiscences of a

Stock Operator

700

I sometimes think that speculation must be an unnatural sort of business, because

I find that the average speculator has arrayed against him his own nature.

Reminiscences of a

Stock Operator

699 It is absolutely wrong to gamble in stocks the way the average man does.

Reminiscences of a

Stock Operator

698

The speculator's chief enemies are always boring from within. It is inseparable

from human nature to hope and to fear... The successful trader has to fight these

two deep-seated instincts. He has to reverse what you might call his natural

impulses. Instead of hoping he must fear; instead of fearing he must hope. He

must fear that his loss may develop into a much bigger loss, and hope that his

profit may become a big profit.

Reminiscences of a

Stock Operator

697

A trader gets to play the game as the professional billiard player does — that is, he

looks far ahead instead of considering the particular shot before him. It gets to be

an instinct to play for position.

Reminiscences of a

Stock Operator

696

The professional concerns himself with doing the right thing rather than with

making money, knowing that the profit takes care of itself if the other things are

attended to.

Reminiscences of a

Stock Operator

695

A man can't spend years at one thing and not acquire a habitual attitude towards it

quite unlike that of the average beginner. The difference distinguishes the

professional from the amateur. It is the way a man looks at things that makes or

loses money for him in the speculative markets.

Reminiscences of a

Stock Operator

694

But Fate does not always let you fix the tuition fee. She delivers the educational

wallop and presents her own bill, knowing you have to pay it, no matter what

amount it may be.

Reminiscences of a

Stock Operator

693

Of all speculative blunders there are few worse than trying to average a losing

game. My cotton deal proved it to the hilt a little later. Always sell what shows you

a loss and keep what shows you a profit. That was so obviously the wise thing to

do and was so well known to me that even now I marvel at myself for doing the

reverse.

Reminiscences of a

Stock Operator

692

The loss of the money didn't bother me. Whenever I have lost money in the stock

market I have always considered that I have learned something; that if I have lost

money I have gained experience, so that the money really went for a tuition fee. A

man has to have experience and he has to pay for it.

Reminiscences of a

Stock Operator

691

I knew that unless I had sufficient trading capital I would not be able to use good

judgment. Without adequate margins it would be impossible to take the cold-

blooded, dispassionate attitude toward the game that comes from the ability to

afford a few minor losses such as I often incurred in testing the market before

putting down the big bet.

Reminiscences of a

Stock Operator

690

I have come to feel that it is as necessary to know how to read myself as to know

how to read the tape. I have studied and reckoned on my own reactions to given

impulses or to the inevitable temptations of an active market, quite in the same

mood and spirit as I have considered crop conditions or analyzed reports of

earnings.

Reminiscences of a

Stock Operator

689

When you read contemporary accounts of booms or panics the one thing that

strikes you most forcibly is how little either stock speculation or stock speculators

today differ from yesterday. The game does not change and neither does human

nature.

Reminiscences of a

Stock Operator

688

A man does not swear eternal allegiance to either the bull or the bear side. His

concern lies with being right.

Reminiscences of a

Stock Operator

687

I was not, and I never have felt that I was, wedded indissolubly to one or the other

side of the market. That a bull market has added to my bank account or a bear

market has been particularly generous I do not consider sufficient reason for

sticking to the bull or the bear side after I receive the get-out warning.

Reminiscences of a

Stock Operator

686

And there is another thing to remember, and that is that a market does not

culminate in one grand blaze of glory. Neither does it end with a sudden reversal of

form. A market can and does often cease to be a bull market long before prices

generally begin to break.

Reminiscences of a

Stock Operator

685

I cleared about three million dollars in 1916 by being bullish as long as the bull

market lasted and then by being bearish when the bear market started. As I said

before, a man does not have to marry one side of the market till death do them

part.

Reminiscences of a

Stock Operator

684

On the news the market broke badly and I naturally covered. It was the only play

possible. When something happens on which you did not count when you made

your plans it behooves you to utilize the opportunity that a kindly fate offers you.

Reminiscences of a

Stock Operator

683

I have in mind certain hazards of speculation that from time to time remind a man

that no profit should be counted safe until it is deposited in your bank to your

credit.

Reminiscences of a

Stock Operator

682

The belief in miracles that all men cherish is born of immoderate indulgence in

hope. There are people who go on hope sprees periodically and we all know the

chronic hope drunkard that is held up before us as an exemplary optimist.

Reminiscences of a

Stock Operator

681

At first, when I listened to the accounts of old-time deals and devices I used to

think that people were more gullible in the 1860's and 70's than in the 1900's. But I

was sure to read in the newspapers that very day or the next something about the

latest Ponzi or the bust-up of some bucketing broker and about the millions of

sucker money gone to join the silent majority of vanished savings.

Reminiscences of a

Stock Operator

680

In booms, which is when the public is in the market in the greatest numbers, there

is never any need of subtlety, so there is no sense of wasting time discussing

either manipulation or speculation during such times; it would be like trying to find

the difference in raindrops that are falling synchronously on the same roof across

the street.

Reminiscences of a

Stock Operator

679

It is enough for the experienced trader to perceive that something is wrong. He

must not expect the tape to become a lecturer. His job is to listen for it to say 'Get

out!' and not wait for it to submit a legal brief for approval.

Reminiscences of a

Stock Operator

678

When I lose money by reason of some development which nobody could foresee I

think no more vindictively of it than I do of an inconveniently timed storm. Life itself

from the cradle to the grave is a gamble and what happens to me because I do not

possess the gift of second sight I can bear undisturbed.

Reminiscences of a

Stock Operator

677

Among the hazards of speculation the happening of the unexpected—I might even

say of the unexpectable—ranks high. There are certain chances that the most

prudent man is justified in taking—chances that he must take if he wishes to be

more than a mercantile mollusk.

Reminiscences of a

Stock Operator

676

The theory that most of the sudden declines or particular sharp breaks are the

results of some plunger's operations probably was invented as an easy way of

supplying reasons to those speculators who, being nothing but blind gamblers, will

believe anything that is told them rather than do a little thinking.

Reminiscences of a

Stock Operator

674

I admit that I do get irresistible impulses at times to do certain things in the market.

It doesn't matter whether I am long or short of stocks. I must get out. I am

uncomfortable until I do. I myself think that what happens is that I see a lot of

warning-signals. Perhaps not a single one may be sufficiently clear or powerful to

afford me a positive, definite reason for doing what I suddenly feel like doing.

Reminiscences of a

Stock Operator

673

The training of a stock trader is like a medical education. The physician has to

spend long years learning anatomy, physiology, materia medica and collateral

subjects by the dozen. He learns the theory and then proceeds to devote his life to

the practice.

Reminiscences of a

Stock Operator

672

You can transmit knowledge—that is, your particular collection of card-indexed

facts—but not your experience. A man may know what to do and lose money—if

he doesn't do it quickly enough.

Reminiscences of a

Stock Operator

671

Years of practice at the game, of constant study, of always remembering, enable

the trader to act on the instant when the unexpected happens as well as when the

expected comes to pass.

Reminiscences of a

Stock Operator

670

Observation, experience, memory and mathematics—these are what the

successful trader must depend on. He must not only observe accurately but

remember at all times what he has observed.

Reminiscences of a

Stock Operator

669

A man can have great mathematical ability and an unusual power of accurate

observation and yet fail in speculation unless he also possesses the experience

and the memory. And then, like the physician who keeps up with the advances of

science, the wise trader never ceases to study general conditions, to keep track of

developments everywhere that are likely to affect or influence the course of the

various markets.

Reminiscences of a

Stock Operator

668

Of course, it often happens that an experienced trader acts so quickly that he

hasn't time to give all his reasons in advance—but nevertheless they are good and

sufficient reasons, because they are based on facts collected by him in his years of

working and thinking and seeing things from the angle of the professional, to whom

everything that comes to his mill is grist.

Reminiscences of a

Stock Operator

667

Experience has taught me that the way a market behaves is an excellent guide for

an operator to follow. It is like taking a patient's temperature and pulse or noting

the colour of the eyeballs and the coating of the tongue.

Reminiscences of a

Stock Operator

666

I study because my business is to trade. The moment the tape told me that I was

on the right track my business duty was to increase my line. I did. That is all there

is to it.

Reminiscences of a

Stock Operator

665

I have found that experience is apt to be a steady dividend payer in this game and

that observation gives you the best tips of all.

Reminiscences of a

Stock Operator

664

An old broker once said to me: 'If I am walking along a railroad track and I see a

train coming toward me at sixty miles an hour, do I keep on walking on the ties?

Friend, I sidestep. And I do not even pat myself on the back for being so wise and

prudent.'

Reminiscences of a

Stock Operator

663

I cannot expect to play certainties only. I must reckon on probabilities — and

anticipate them.

Reminiscences of a

Stock Operator

662

I have sometimes bought a stock during an undoubted bull market and found out

that other stocks in the same group were not acting bullishly and I have sold out

my stock. Why? Experience tells me that it is not wise to buck against what I may

call the manifest group-tendency.

Reminiscences of a

Stock Operator

661

I never buy a stock even in a bull market, if it doesn't act as it ought to act in that

kind of market.

Reminiscences of a

Stock Operator

660

Speculation in stocks will never disappear. It isn't desirable that it should. It cannot

be checked by warnings as to its dangers. You cannot prevent people from

guessing wrong no matter how able or how experienced they may be.

Reminiscences of a

Stock Operator

659

The Budget should be balanced, the Treasury should be refilled, public debt

should be reduced, the arrogance of officialdom should be tempered and

controlled, and the assistance of foreign lands should be curtailed lest the Republic

become bankrupt. People must again learn to work, instead of living on public

assistance.

Marcus Tullius Cicero,

55 BC

658

Come on you raver, you seer of visions — Come on you painter, you piper, you

prisoner, and shine! Pink Floyd

657

The Dude abides. I don't know about you but I take comfort in that. It's good

knowin' he's out there. The Dude. Takin' 'er easy for all us sinners... The Big Lebowski

656

I'll tell you what I'm blathering about... I've got information, man! New shit has

come to light! The Big Lebowski

655 Obviously you're not a golfer. The Big Lebowski

654 I'm in the high-fidelity, first-class traveling section, I think I need a lear jet... Pink Floyd

653 ...that's just, like, your opinion, man. The Big Lebowski

652 This aggression will not stand, man! The Big Lebowski

651 Losers average losers. Paul Tudor Jones

650 Always look for a trending market. Paul Tudor Jones

649 If you sit by the river long enough, you will see the bodies of your enemies float by. Sun Tzu

648

To play ball, you need three things. Heart. Mind. Balls. If you have two, you can

play, but you will never be great. To be great, all three. Frank Curiel

647

I looked up and saw the Valkyries coming and heard the grim reaper's scythe

knocking on my door. I did my best to run to the light. Cliff Asness

646

...the storm in the equity market was surely a warning. The most sophisticated

hedge funds had lost control of their models. The rocket scientists had blown up

their rockets. More Money Than God

645 That which does not kill me, makes me stronger. Friedrich Nietzsche

644 I have lived a rich, restless, magnificent life. Henry de Monfreid

643

To all great human traders, knowing when to go for the jugular and when to be

patient is a large part of the skill; spotting the best opportunities and betting big

could make a greater contribution to the bottom line than increasing the share of

bets that you were right on. More Money Than God

642

Typically bubbles have an asymmetric shape. The boom is long and slow to start.

It accelerates gradually until it flattens out again during the twilight period. The bust

is short and steep because it involves the forced liquidation of unsound positions.

Disillusionment turns into panic, reaching its climax in a financial crisis. George Soros

641

Every bubble has two components: an underlying trend that prevails in reality and

a misconception relating to that trend. When a positive feedback develops

between the trend and the misconception, a boom-bust process is set in motion.

The process is liable to be tested by negative feedback along the way, and if it is

strong enough to survive these tests, both the trend and the misconception will be

reinforced. George Soros

640

Bubbles are not the only manifestations of reflexivity, but they are the most

spectacular. George Soros

639

...a positive feedback is self-reinforcing. It cannot go on forever because

eventually, market prices would become so far removed from reality that market

participants would have to recognize them as unrealistic. When that tipping point is

reached, the process becomes self-reinforcing in the opposite direction. George Soros

638

Reflexivity sets up a feedback loop between market valuations and the so-called

fundamentals which are being valued. The feedback can be either positive or

negative. George Soros

637

Financial markets, far from accurately reflecting all the available knowledge,

always provide a distorted view of reality. This is the principle of fallibility. The

degree of distortion may vary from time to time. Sometimes it's quite insignificant,

at other times it is quite pronounced. George Soros

636

All great deeds and all great thoughts have a ridiculous beginning. Great works are

often born on a street corner or in a restaurant's revolving door. Albert Camus

635

One of the lessons of history is that nothing is often a good thing to do and always

a clever thing to say. Will Durant

634 Hope is independent of the apparatus of logic. Norman Cousins

633

Wall Street is populated by conventional thinkers, serving compromised ends, in

the confines of a broken system. Jack Sparrow

632

Events as disparate as Japanese trade negotiations and Mexican assassinations

had been linked in terrifying ways by the tentacles of leverage. More Money Than God

631 I stood back and looked at myself with awe: I saw a perfectly honed machine. George Soros

630

Too many men don't want to do something after they make money. They just go on

and make a lot more money. Alfred Winslow Jones

629

Great investors tend to have a 'screw loose,' pursuing the game not for profit, but

for sport. David Swensen

628

It's time to be vicious. It's time to kill, and enjoy the killing, so something better can

live. Not enough is said about the importance of abandoning crap. Ira Glass

627

The beating heart of creativity is a passionate commitment to exploring, testing

and discarding new ideas. Jack Sparrow

626 What everybody 'knows' is frequently wrong. Peter Drucker

625

Hold on loosely, but don't let go... if you cling too tightly, you're gonna lose

control... 38 Special

624 Rommel, you magnificent bastard. I read your book! Patton

623

I thought random walk was bullshit... The whole idea that an individual can't make

serious money with a competitive edge over the rest of the market is wacko. Helmut Weymar

622 Not a bear in sight. The bear patrol is working like a charm. Homer J. Simpson

621

The stock market is an inexact phenomenon. Laypersons' opinions often seem as

worthy as professionals', and shoeshine men and brokers compete for genius. Michael Steinhardt

620 Fear is an impediment to clarity. So is greed. Jack Sparrow

619

The best poker players — the very best, world-class players when they are in

action — are machines. They are cool headed, intuitive, impassive, imperturbable,

and relentless.

Zen and the Art of

Poker

618 A man who has attained mastery of an art reveals it in his every action. Samurai maxim

617

When the reality of power has been surrendered, it's playing a dangerous game to

seek to retain the appearance of it. Alexis de Tocqueville

616

The world is ruled by letting things take their course. It cannot be ruled by

interfering. Lao Tzu

615 The way of the wise man is to act and not compete. Zen proverb

614

You and your opponent are one. There is a coexisting relationship between you.

You coexist with your opponent and become his complement, absorbing his attack

and using his force to overcome him. Bruce Lee

613 Become more acutely aware of what's happening right now, this very moment. Phil Jackson

612

No matter what the activity — be it music, art, sports, a profession or trade — there

is a state of achievement wherein it becomes so perfected through practice and a

certain mental attitude, that it seems to function independently of the performer. Arthur Sokoloff

611

He who is skilled in attack flashes forth from the topmost heights of heaven,

making it impossible for the enemy to guard against him. Sun Tzu

610

Withdraw like a mountain in movement, advance like a rainstorm. Strike and crush

with shattering force; go into battle like a tiger. Zhuge Liang

609

Aggression exists in nature. What may look like a harmless bumble bee is a highly

aggressive force on its own level, engaged in a life-and-death struggle. What

appears to be a delicate flower is in fact an organism violently struggling and

forcing itself into life. These and other delicacies (at least as they appear to the

human eye) could easily be mistaken for some form of passivity, when in fact there

is a very different paradigm present.

Zen and the Art of

Poker

608

The good fighters of old first put themselves beyond the possibility of defeat, and

then waited for an opportunity of defeating the enemy. Sun Tzu

607 Make sure you're right, then go ahead. Davy Crockett

606

In battle, momentum means riding on the force of the tide of events. If enemies are

on the way to destruction, then you follow up and press them. Liu Ji

605

In war one sees one's own difficulties, and does not take into account those of the

enemy; one must have confidence in one's self. Napoleon

604 Induce others to construct a formation while you yourself are formless. Sun Tzu

603 Fixity is death; fluidity is life. Winston L. King

602 Whoever has form can be defined, and whoever can be defined can be overcome. Sun Tzu

601

Whenever you pursue people on the run, chasing beaten soldiers, you must make

sure whether they are really fleeing or just feigning. Liu Ji

600

The rule is: When the enemy is far away but tries to promote hostilities, he wants

you to move forward. Sun Tzu

599

To overcome the intelligent by folly is contrary to the natural order of things; to

overcome the foolish by intelligence is in accord with the natural order. To

overcome the intelligent by intelligence, however, is a matter of opportunity. Zhuge Liang

598 He who fears being conquered is sure of defeat. Napoleon

597 Perhaps we must always advance a little by zig-zags. Theodore Roosevelt

596 Victory shifts from man to man. Homer's Iliad

595

In war, when adversaries are orderly in their movements and are at their sharpest,

it is not yet time to fight with them; it is best to fortify your position and wait. Watch

for their energy to wane after being on alert for a long time; then rise and strike

them. Liu Ji

594 Good warriors prevail when it is easy to prevail. Sun Tzu

593 When two tigers fight, one will be killed and the other will be seriously wounded. Zen proverb

592

If a player is not in a normal rhythm or in balance with the game, that is a signal

that something is wrong. Good players spot this rhythm shift as quickly as a

musician hears a note out of tune. Steve Fox

591

When you see the enemy to be empty, proceed; where you see the enemy to be

full, stop. Zhuge Liang

590

Years of experience eventually teach you that your main battle, always, is with

yourself — your propensity for errors, for rationalizing marginal hands into good

hands, lack of concentration, misreading other players, emotional eruptions,

impatience, and so on. Your opponents are merely dim outlines that come and go.

Few of them ever reach the exalted heights of damage that you can inflict on

yourself.

Zen and the Art of

Poker

589

It is important to come to the table with the goal of mastering yourself, not just the

game. In many ways, this is more important than mastering the game. The reason

is simple: For the most part, you already know the game. This mastering of

yourself, however, is the work of a lifetime.

Zen and the Art of

Poker

588

Even if our efforts of attention seem for years to be producing no result, one day a

light that is in exact proportion to them will flood the room. Simone Weil

587

Like an Olympic runner who learns to run 'within himself,' you will eventually

become comfortable inside your knowledge of the game. You will cease striving;

the clouds will disperse, the sun comes out.

Zen and the Art of

Poker

586

It's just like learning archery; eventually you reach a point where ideas are ended

and feelings forgotten, and then you suddenly hit the target. Zen master Ying-An

585 When the way comes to an end, then change. Having changed, you pass through. I Ching

584

From the moment we cease trying to swim upstream and begin to flow with the

current, something changes within us. Arthur Sokoloff

583

When we are focused exclusively on our own emotions (as we often are), the

emotions of others tend to be obscured. When we make ourselves neutral,

however, we find that the canvas suddenly becomes blank and the emotions of

others begin to appear.

Zen and the Art of

Poker

582

You should not grieve over bad shots; learn now not to rejoice over the good ones.

You must free yourself from the buffetings of pleasure and pain, and learn to rise

above them in easy equanimity. This too, you must practice unceasingly — you

cannot conceive how important it is. Eugen Herrigel

581

You must not be astonished at anything that comes up... Accept it all calmly, as if

you were a mere spectator, uninterested, and were observing a process for which

you need not feel responsible... The result, in the end, is perfect stillness. Eugen Herrigel

580 Teach us to care and not to care... teach us to sit still. T.S. Eliot

579

Attachment is the great fabricator of illusions; reality can be attained only by

someone who is detached. Simone Weil

578

Before enlightenment: Chop wood, carry water. After enlightenment: Chop wood,

carry water. Zen proverb

577

Players sometimes think that great things are called for — sophisticated plays,

plays that go beyond the ordinary, into the extraordinary, where some other realm

of effort is required. In fact, once skill is achieved, ordinary levels of calm are

sufficient.

Zen and the Art of

Poker

576 Sitting quiet, doing nothing, spring comes, and grass grows by itself. Zen proverb

575 Everything is true just as it is: Why dislike it? Why hate it? Zen proverb

574

This is the point you want to get to: a detachment so complete that it almost

borders on disinterest. (Cautionary note: it is important to have a large enough

bankroll to allow you to play like this.)

Zen and the Art of

Poker

573

Everything that happens, and above all what happens to me, should be observed

impartially, as though on the deepest level it did not concern me. Eugen Herrigel

572

Please don't think that I'm bragging about the fact that I didn't lose in saying that I

know the secret of not losing, but winning. I really do know the secret. It's very

stupid and simple and amounts to ceaseless self-control at all stages of the game

and not getting excited. That's all there is to it. That way you can't lose and are

bound to win. But that's not the point. The point is whether, once you know the

secret, you are capable of exploiting it. Fyodor Dostoevsky

571

Remain dispassionate. Make it your goal to achieve a cool and calm demeanor.

This is necessary in order to 'keep the airwaves clear' in order to read incoming

signals correctly.

Zen and the Art of

Poker

570

Many gray areas exist, many borderline decisions. Superheated emotions can tip

all these borderline decisions the wrong way, like dominoes, until they add up to

disaster. Skill at detachment (and rebounding from losses) is important: the ability

to dismiss the previous hand from mind is crucial.

Zen and the Art of

Poker

569 When the pools of perception are cleansed, everything appears as it is. Zen proverb

568

As regards the quietude of the sage, he is not quiet because quietness is said to

be good. He is quiet because the multitude of things cannot disturb his quietude. Chuang-tzu

567 There is an uphill road and there is a downhill road. Japanese proverb

566 The way goes onward and contains its own correction. Eugen Herrigel

565

Imagine a boxer coming into the ring, expecting to meet his opponent face to face.

Instead, he finds himself in a ring filled only with fog. He swings wildly, but makes

no contact with anything. His force is dissipating, and there is little he can do. Arthur Sokoloff

564

It is not enough to rely on luck or hope to carry us past the weak parts of our

game. These parts must be attended to. The system must be whole and complete.

Zen and the Art of

Poker

563

The spider dances her web without knowing that there are flies who will get caught

in it. Eugen Herrigel

562 Get the facts, or the facts will get you. Thomas Fuller

561 Among other evils which being unarmed brings you, it causes you to be despised. Niccolo Machiavelli

560 Thousands of repetitions, and out of one's true self perfection emerges. Neville Shulman

559 Should you desire the great tranquility, prepare to sweat white beads. Zen master Hakuin

558 The technically learnable part of it must be practiced to the point of repletion. Eugen Herrigel

557 You must act as if the goal were infinitely far off. Eugen Herrigel

556 Let others take their own way, and I take my own. Japanese proverb

555

War, battles, and conflicts of all kinds (including poker) set in motion forces that

quickly become unpredictable. Small defects or problems that are present at the

beginning can quickly spiral out of control. And if small problems can do this, think

what starting out with large problems means.

Zen and the Art of

Poker

554 There is nothing so subject to the inconstancy of fortune as war. Miguel de Cervantes

553 Only by avoiding the beginning of things can we escape their ending. Cyril Connolly

552 One inch ahead all is darkness. Japanese proverb

551 Wait for a good pitch to hit. Ted Williams

550

We must be able to back away from the game, but not by putting great

commitment and the muscle of our emotions into doing so.

Zen and the Art of

Poker

549 Adopt the pace of nature; her secret is patience. Ralph Waldo Emerson

548

Develop a readiness to participate — that is, to explode into action — which is

separate from the relaxed state you are in at the times in between.

Zen and the Art of

Poker

547 There is interaction if there is a call for it, no interaction if there is no call for it. Zen master Yangshan

546

Do you have the patience to wait... til your mud settles and the water is clear? Can

you remain unmoving... til the right action arises by itself? Lao Tzu

545

...over the long run the hands you fold make the hands you do play stand out more

sharply and give them more power.

Zen and the Art of

Poker

544 You must learn to wait properly. Eugen Herrigel

543 Be the ball. Caddyshack

542 Who knows this morning what will happen tonight? Chinese proverb

541 Buy when there's blood in the streets, even if the blood is your own. Baron Rothschild

540

Dealing with failure is easy: Work hard to improve. Success is also easy to handle:

You've solved the wrong problem. Work hard to improve. Alan Perlis

538 Change breaks the brittle. Jan Houtema

537

People don't change their minds. They die, and are replaced by people with

different opinions. Arturo Albergati

536

As all these results were obtained, not by any heroic method, but by patient and

detailed reasoning, I began to think it probable that philosophy had erred in

adopting heroic remedies for intellectual difficulties, and that solutions were to be

found merely by greater care and accuracy. Bertrand Russell

535

Keep away from people who try to belittle your ambitions. Small people always do

that, but the really great make you feel that you, too, can become great. Mark Twain

534

Politics is not the art of the possible. It consists in choosing between the disastrous

and the unpalatable. J.K. Galbraith

533

We act as though comfort and luxury were the chief requirements of life, when all

that we need to make us happy is something to be enthusiastic about. Albert Einstein

532

The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-

meaning but without understanding. Louis David Brandeis

531 The imagination of nature is far, far greater than the imagination of man. Richard Feynman

530

There's practice, and then there is deep practice. All too often, the first is a waste

of time. Jack Sparrow

529

The major difference between a thing that might go wrong and a thing that cannot

possibly go wrong is that, when a thing that cannot possibly go wrong goes wrong,

it usually turns out to be impossible to get at or repair. Douglas Adams

528

I do what I do best, I take scores. You do what you do best, try to stop guys like

me. Heat

527 He knew the risks, he didn't have to be there. It rains... you get wet. Heat

526

Do you see me doin' thrill seeker liquor store robberies with a 'Born To Lose' tattoo

on my chest? Heat

525

Do not have any attachments, do not have anything in your life you are not willing

to walk out on in 30 seconds flat if you spot the heat around the corner. Heat

524 I will either find a way, or make one. Hannibal

523

A fundamental characteristic of our economy is that the financial system swings

between robustness and fragility, and these swings are an integral part of the

process that generates business cycles. Hyman Minsky

522 A man must constantly exceed his level. Bruce Lee

521

I don't have much formal education in these things, but you learn. You build

enough stuff; after a while, you see it. And if you reverse-engineer enough things,

you see what other people have done. Steve Perlman

520

This is a war universe. War all the time. There may be other universes, but ours

seems to be based on war and games. William S. Burroughs

519

There are no limits. There are plateaus, but you must not stay there, you must go

beyond them. If it kills you, it kills you. A man must constantly exceed his level. Bruce Lee

518

...if you always put limits on what you can do, physical or anything else, it'll spread

over into the rest of your life. It'll spread into your work, into your morality, into your

entire being. Bruce Lee

517

…they are taking risks all the time, but they don't want to acknowledge that they

are taking risks. They want to pretend everything is risk-free. Paul Buchheit

516

I kind of like uncertainty to some extent, because it's a little bit of suspense and

excitement and adventure... And you can learn a lot even if things don't work out.

But not everyone likes adventure. A lot of people seem to be against uncertainty,

actually. In all areas of life. Paul Buchheit

515

People have a narrow concept of what's possible, and we're limited more by our

own ideas of what's possible than what really is possible. So they just get

uncomfortable, and they kind of tend to attack it for whatever reason. Paul Buchheit

514 I think, in general, people are uncomfortable with things that are different. Paul Buchheit

513

Paradoxically, the more that governments try to protect us against financial

disasters, the more likely they are to occur. Tony Boekh

511

Long wave forces are very powerful and operate slowly over time, making them

hard to recognize by most people. The long wave is like the tide in the ocean,

powerful and operating below the surface. Tony Boekh

510

Conventional thinking, particularly around important turning points, is usually not

very helpful because it tends to focus on the extrapolation of past trends into the

future. Tony Boekh

509

To learn consistently, most people need not only to understand their own biases,

but also to improve the quality of the feedback they receive. Decision Traps

508

'Know your own strength' can be taken as a pessimistic warning or a lofty

aspiration. It all depends on how you look at it. But then that's pretty much true of

everything. Jack Sparrow

507

Great traders can afford to be humble. In the face of ever present uncertainty, their

huge profits give them comfort. Jack Sparrow

506 To a large extent the world seems to conspire against learning. Decision Traps

505 Experience is a good teacher, but she sends in terrific bills. Minna Antrim

504

We synthesize and integrate new information into old knowledge. Like a glass of

red wine poured into a bowl of clear water, the new blends with the old. Thus, it

becomes impossible to reverse the process. Decision Traps

503

Our minds are not filing cabinets that store information the way it came in. Instead,

we edit the information heavily, cut it up into pieces, and file the edited extracts in

multiple parts of our minds, depending on what they are associated with. Decision Traps

502

We all know the false clarity of hindsight. Events may seem inevitable in hindsight,

even though they might have been very hard to predict beforehand. Decision Traps

501 Victory has a thousand fathers; defeat is an orphan. the Duke of Wellington

500

Because we like to believe that we caused successful outcomes and we like to

rationalize that we weren't responsible when things turned out badly, most people

suffer from an attribution bias that can destroy useful feedback. Decision Traps

499

The illusion of control and accompanying false claims of credit for good outcomes

are firmly rooted biases to allay our deepest fears about an uncontrollable world. Decision Traps

498

...only by recognizing the role of chance in successes can you realistically learn

which of your actions you should carefully repeat and which could be improved.

Falsely claiming credit is an important barrier to learning. Decision Traps

497

Why don't people learn from their experience? For one, the data we receive can

usually be interpreted in more than one way. And even when the evidence is clear

enough that we should be able to learn from it, we are naturally biased to interpret

it in a way that preserves our positive self-image. Decision Traps

496

There is no veiled incantation, magnetic lodestone, patented formula, or arcane

process any one individual can use to move general market prices, because a

market is millions of people interacting for their own personal reasons. Harvey Houtkin

495

As a general rule of thumb, simplicity beats complexity because simplicity travels

light. Jack Sparrow

494 There is always free cheese in a mousetrap. Mark Skousen

493

I've come to the conclusion that using a financial professional to help you invest is

like getting open-heart surgery from a starving lion... Scott Adams

492

If I've learned one thing in this business, it's that the only thing that always goes

higher is the compensation of the investment pros. Jim Sweeney

491

Wall Street research reports are more sales documents than disinterested

analyses... the tendency is for analysts to play up the good and sugar-coat the

bad. Jeffrey Laderman

490

Even the most brilliant mathematical geniuses will never be able to tell us what the

future holds. In the end, what matters is the quality of our decisions in the face of

uncertainty. Peter L. Bernstein

489

Forecasters, by definition, are biased and untrustworthy recorders of current

economic events. In other words, they tend to uncover evidence that supports their

forecasts, and they ignore or analytically dismiss anything that challenges it. John Liscio

488 We are long term investors. We are in this thing for three or four weeks. King of Queens

487

The gutters of Wall Street are strewn with the bodies of people who looked good

for five years. Marty Whitman

486 When all this is behind you, a whole other world will open up for you. Training Day

485 I ain't got time to bleed. Predator

484

The sooner you match what's in your head with what's in the real world, the better

you'll feel. Training Day

483 Open your eyes, son. Can't you see? Training Day

482 He's a high roller, dog. Training Day

481 This is chess, not checkers! Training Day

480 I walk a higher path, son. Training Day

479

People do not learn as easily from experience as you might expect — even

intelligent, highly motivated people. Decision Traps

478

If you understand your biases, know how to create good feedback, and can

interpret feedback realistically, you can consistently turn your experiences into

reliable knowledge — perhaps for the first time. Decision Traps

477

People sometimes stumble over the truth, but usually they pick themselves up and

hurry about their business. Winston Churchill

476

History shows that whenever authorities limit the commitment to a particular value,

it encourages investors to quantify their worst case scenario (which during times of

financial sector strains can be horrific), leading to a panic and meltdown. BCA Research

475

Wall Street dumps so much BS on the public, you need a shovel to clear yourself a

path. Doug Fabian

474

If you ask five experts where to invest, there will be six answers; the five expert

opinions, plus the right one. Jonathon Clements

473

There is no magic wand that anyone can wave to make you successful,

independently wealthy, and completely happy. Harvey Houtkin

472

Investors often develop a cultlike devotion to one investment guru or another. And

when they do so, objectivity goes out the window. Mark Hulbert

471

What do head-and-shoulders formations, bases and pornography have in

common? They are all very difficult to define, even though some stock-market

technical analysts (and judges) are sure they know them when they see them. John Dorfman

470

After-hours trading is like sex in high school: There's a lot of interest in it, but

probably not that many people actually doing it. Peter Di Teresa

469

Relying solely on your quantitative skills to invest successfully is like trying to fly an

airplane based only on an exquisite knowledge of aeronautical engineering,

ignoring the need of real-world flying experience and lacking a good sense of the

fickleness of both aircraft systems and the weather. William J. Bernstein

468

Leveraging gargantuan sums without a proper appreciation of the capriciousness

of the capital markets is the financial equivalent of skydiving while drunk. And if

your models are largely based on the last few years of data, you've just left your

parachute on the plane... William J. Bernstein

467

There was no shortage of terror and despair in the financial markets . . . It was all a

bit reminiscent of the fable about the little boy who cried wolf. By the time one

finally appeared, most people had lost their capacity to believe and be alarmed. Louis Rukeyser

465

People who buy stocks when they get bonuses and sell them when the roof starts

to leak are entrusting their investment decisions to their roofs. Andrew Tobias

464

The lure of online trading seems to be that here is something you can do with no

skill, no knowledge, and yet you can make tons of money. Meir Statman

463

An old-fashioned bear doesn't stab you with a sword, as in the crash of 1987 and

the mini-crash of 1989. It nicks you with a thousand cuts. John Dorfman

462 A funny thing happened on the way to the mortuary. The bull got well. Louis Rukeyser

461

It's heartening to know that some traditions survive on Wall Street. For example,

the idea that bad news for the economy is good news for financial markets. Tom Petruno

460

There is no shortage of media accounts that try to answer our questions about the

market today, but there is a shortage within these accounts of relevant facts or

considered interpretations of them. Many news stories in fact seem to have been

written under a deadline to produce something — anything — to go along with the

numbers from the market. Robert J. Shiller

459

Wall Street is a tough teacher but also a good teacher. If you have any weakness

— arrogance, laziness, stinginess, cowardice, procrastination — the market will

zero in on that weakness and make you pay dearly. Richard Russell

458

In this business, you never stop learning. Let me put it another way. If you stop

learning, you're on your way to going out of business. Richard Russell

457

The situation reminds one of a Ouija board, in which players are encouraged to

interpret the meaning of movements in their trembling hands and to distill forecasts

from them. Or the stock market is seen as an oracle, issuing mysterious and

meaningless pronouncements, which we then ask our leaders to interpret,

mistakenly investing their interpretations with authority. Robert J. Shiller

456

Conventional wisdom interprets the stock market as reacting to new era theories.

In fact, it appears that the stock market often creates new era theories, as

reporters scramble to justify stock market price moves. Robert J. Shiller

455

Sometimes, when you can't figure out a good defense, the best thing to do is to go

on offense. Seth Klarman

454 Yeah, but it's the only game in town! Canada Bill Jones

453

Investors generally overestimate their ability to see the future, and the worst of

them act as if they know exactly what lies ahead. Howard Marks

452

The fact that we don't know where trouble will come from shouldn't allow us to feel

comfortable in times when prices are full. The higher prices are relative to intrinsic

value, the more we should allow for the unknown. Howard Marks

451 Risk means more things can happen than will happen. Elroy Dimson

450

Most people view the future as likely to repeat past patterns, which it may or may

not do. They tend to think of the future in terms of a single scenario, whereas it

really consists of a wide range of possibilities. Howard Marks

449

Investing defensively requires that when everything seems to be going well and

investors are feeling positive, we must sense the implicit danger and prepare for

negative developments. Howard Marks

448

When governments are big issuers of debt, it can be hard for non-government

issuers to raise money. But when governments are big buyers of securities

instead, the capital they inject into the markets can make it easy for others to issue

securities. Howard Marks

447

In the same way that expanded risk tolerance accompanies appreciated past

prices and contributes to the risk of loss, so does risk aversion tend to rise in times

of depressed prices, increasing the risk of missed opportunity. Howard Marks

446 Risk aversion is absolutely essential for the markets to function properly. Howard Marks

445

There are two main risks in the investment world: the risk of losing money and the

risk of missing opportunity. You can completely avoid one or the other, or you can

compromise between the two, but you can't eliminate both. Howard Marks

444

[Strong opinions weakly held] is equally useful for evaluating an already-final

forecast in the face of new information. It sensitizes one to the weak signals of

changes coming over the horizon and keeps the hapless forecaster from becoming

so attached to their model that reality intrudes too late to make a difference. Paul Saffo

443

Eventually your intuition will kick in and a new hypothesis will emerge out of the

rubble, ready to be ruthlessly torn apart once again. You will be surprised by how

quickly the sequence of faulty forecasts will deliver you to a useful result. Paul Saffo

442

Since the mid-1980s, my mantra for this process is 'strong opinions, weakly held.'

Allow your intuition to guide you to a conclusion, no matter how imperfect — this is

the 'strong opinion' part. Then — and this is the 'weakly held' part — prove yourself

wrong. Engage in creative doubt. Paul Saffo

441

Iterate the process a few times, and it is surprising how quickly one can get to a

useful forecast. Paul Saffo

440

Instead of withholding judgment until an exhaustive search for data is complete, I

will force myself to make a tentative forecast based on the information available,

and then systematically tear it apart, using the insights gained to guide my search

for further indicators and information. Paul Saffo

439

Try as one might, when one looks into the future, there is no such thing as

'complete' information, much less a 'complete' forecast. As a consequence, I have

found that the fastest way to an effective forecast is often through a sequence of

lousy forecasts. Paul Saffo

438

The point of forecasting is not to attempt illusory certainty, but to identify the full

range of possible outcomes. Paul Saffo

437 Hold on tightly, let go lightly. Croupier

436

If you realize that all things change, there is nothing you will try to hold on to. If you

are not afraid of dying, there is nothing you cannot achieve. Lao Tzu

435 If you do not change direction, you may end up where you are heading. Lao Tzu

434 He who knows others is wise. He who knows himself is enlightened. Lao Tzu

433

He who controls others may be powerful, but he who has mastered himself is more

powerful still. Lao Tzu

432 He who conquers others is strong; He who conquers himself is mighty. Lao Tzu

431 Man must accept motion. Lao Tzu

430 Want a cookie? Teddy KGB

429 He beet me... Straight up. Pay heem... pay that man his money. Teddy KGB

428

They're trying to goad me, trying to own me. But this isn't a gunfight. It's not about

pride or ego. It's only about money. Mike McDermott

427

Listen, here's the thing. If you can't spot the sucker in the first half hour at the

table, then you ARE the sucker. Mike McDermott

426

You were lookin' for that third three, but you forgot that Professor Green folded on

Fourth Street and now you're representing that you have it. The DA made his two

pair, but he knows they're no good. Judge Kaplan was trying to squeeze out a

diamond flush but he came up short and Mr. Eisen is futilely hoping that his

queens are going to stand up. So like I said, the Dean's bet is $20. Mike McDermott

425 We can't run from who we are. Our destiny chooses us. Mike McDermott

424

For a man to achieve all that is demanded of him, he must regard himself as

greater than he is.

Johann Wolfgang von

Goethe

423

To know that we know what we know, and that we do not know what we do not

know, that is true knowledge. Confucius

422

Don't ever let them get into your pocket — that means there's no reason to

leverage substantially. Paul Tudor Jones

421

These days, there are many more deep intellectuals in the business, and that,

coupled with the explosion of information on the internet, creates the illusion that

there is an explanation for everything and that the primary task is simply to find

that explanation. Paul Tudor Jones

420 Do not choose to be wrong for the sake of being different. Lord Samuel

419 A smooth sea never made a skilled mariner. unknown

418

...at the end of the day, your job is to buy what goes up and to sell what goes down

so really who gives a damn about PE's? If it's going up you're supposed to be long

it. But there's no question that it's just easier for me to leverage with some degree

of conviction the short side of some markets. Paul Tudor Jones

416

I think there's a natural progression that everyone goes through. The older you get,

the more you'll realize that a quality life is one that has an extraordinary balance in

it. Paul Tudor Jones

415

When I was younger, I had much greater drawdowns, much greater drawdown

frequency, much greater leverage... I'm probably the exact same trader as I was

15 years ago, it's just less risk, less return. Paul Tudor Jones

414

Everything is a function of leverage, how much of a drawdown are you willing to

tolerate, how much leverage do you want to put on. Paul Tudor Jones

413

...every time I've seen volatility like that, I don't care what the market was, whether

it was soybeans in '76 or '83 or whether it was silver at the top in 1980 or whether

it was some of the biotech stocks at the top earlier in the '90’s, when you get that

kind of volatility you know that generally that's associated with a top. Paul Tudor Jones

412

You look at every bear market and they've always basically occurred because of

an up-tick in inflation and an up-tick in interest rates. Paul Tudor Jones

411

The crash was something that was imminently forecastable to somebody that

understood the measure of derivatives and how large they had grown in such a

relatively short period of time and the impact that it would have on a relatively

unknowing and naïve market. Paul Tudor Jones

410

...at the end of the day, the most important thing is how good are you at risk

control. Ninety-percent of any great trader is going to be the risk control. Paul Tudor Jones

409

It doesn't make any difference whether it's pork bellies or Yahoo. At the end of the

day, it's all the same. You need to understand what factors you need to have at

your disposal to develop a core competency to make a legitimate investment

decision in that particular asset class. Paul Tudor Jones

408

You pick an instrument and there's a whole variety of benchmarks, things that you

look at when trading a particular instrument whether it's a stock or a commodity or

a bond. There's a fundamental information set that you acquire with regard to each

particular asset class and then you overlay a whole host of technical indicators and

that's how you make a decision. Paul Tudor Jones

407

The secret to being successful from a trading perspective is to have an

indefatigable and an undying and unquenchable thirst for information and

knowledge. Because I think there are certain situations where you can absolutely

understand what motivates every buyer and seller and have a pretty good picture

of what's going to happen. And it just requires an enormous amount of grunt work

and dedication to finding all possible bits of information. Paul Tudor Jones

406

You've got to look at good traders historically. If a trader can on average annually

deliver two to three times their worst drawdown, then that's a very good track

record, and I'd say that that's what I try to do. Paul Tudor Jones

405

There's no reason to take substantial amounts of financial risk ever, because you

should always be able to find something where you can skew the reward risk

relationship so greatly in your favor that you can take a variety of small

investments with great reward risk opportunities that should give you minimum

drawdown pain and maximum upside opportunities. Paul Tudor Jones

404

I'd say that my investment philosophy is that I don't take a lot of risk, I look for

opportunities with tremendously skewed reward-risk opportunities. Paul Tudor Jones

403

My grandfather told me at a very early age that you are only worth what you can

write a check for tomorrow... that's one reason that I've always liked the futures

market so much, because you can generally get liquid and be in cash in literally

the space of a few minutes. Paul Tudor Jones

402

I think I am the single most conservative investor on earth in the sense that I

absolutely hate losing money. Paul Tudor Jones

401

We run a laissez-faire, entrepreneurial shop. I started my career in futures, and the

rallying cry was always free markets for free men, so I've tried to create an open

architecture here for traders to test their ideas and thrive. Louis Moore Bacon

400

We kind of had the moniker 'global macro' thrust upon us. We didn't sign up for it.

But I look at it as kind of the 007 license to do whatever we want, and we're in a

period now where globally there is no lack of opportunity... Louis Moore Bacon

399

[Paul Tudor Jones] taught me to think in points, not dollars, and he always used to

say, 'It's just points, it is not money.' He gave me an ongoing tutorial in

disassociating oneself from the result of the trade, yet still having passion about it. Louis Moore Bacon

398

I'll never forget the day the New Orleans Junior League board came to visit [Eli

Tullis] during lunch. He was getting absolutely massacred in the cotton market that

day, but he charmed those little old ladies like he was a movie star. It put

everything in perspective for me. Paul Tudor Jones

397

I lost my stakes a couple of times, which taught me risk control and risk

management. Losing those stakes in my early 20s gave me a healthy dose of fear

and respect for Mr. Market and hardwired me for some great money management

tools. Paul Tudor Jones

396

...the inefficiencies that existed in the '70s and '80s and even the '90s are not as

readily seen. But in this business there will also always be that upper tier — that

top 10 or 20 percent of managers who will outperform everyone else. Paul Tudor Jones

395

The only way to learn how to trade during that last, exquisite third of a move is to

do it, or, more precisely, live it — a sort of baptism by fire. One has to experience

both the elation and fear as markets move five and six standard deviations from

conventional definitions of value. Paul Tudor Jones

394

While I'm a staunch advocate of higher education, there is no training —

classroom or otherwise — that can prepare for trading the last third of a move,

whether it's the end of a bull market or the end of a bear market. There's typically

no logic to it; irrationality reigns supreme, and no class can teach what to do during

that brief, volatile reign. Paul Tudor Jones

393

...technical analysis is at the bottom of the study list for many of the younger

generation, particularly since the skill often requires them to close their eyes and

trust the price action. Paul Tudor Jones

392

I see the younger generation hampered by the need to understand and rationalize

why something should go up or down. Usually, by the time that becomes self-

evident, the move is already over. When I got into the business, there was so little

information on fundamentals, and what little information one could get was largely

imperfect. We learned just to go with the chart. Paul Tudor Jones

391

It's very hard to find a pure fundamentalist who's also a very successful macro

trader... Paul Tudor Jones

390

While I spend a significant amount of my time on analytics and collecting

fundamental information, at the end of the day, I am a slave to the tape and proud

of it. Paul Tudor Jones

389

The inability to read a tape and spot trends is also why so many in the relative

value space who rely solely on fundamentals have been annihilated in the past

decade. Markets have consistently experienced '100-year events' every five years. Paul Tudor Jones

388

When it comes to trading macro, you cannot rely solely on fundamentals; you have

to be a tape reader, which is something of a lost art form. Paul Tudor Jones

387

When trading macro, you never have a complete information set or information

edge the way analysts can have when trading individual securities. It's a hell of a

lot easier to get an information edge on one stock than it is on the S&P 500. Paul Tudor Jones

386

I love trading macro. If trading is like chess, then macro is like three-dimensional

chess. It is just hard to find a great macro trader. Paul Tudor Jones

385 Tacit assumptions have sunk many boats in the world of science and engineering. Jon Kabat-Zinn

384

The test of a first-rate intelligence is the ability to hold two opposite ideas in mind

at the same time and still retain the ability to function. F. Scott Fitzgerald

383

Losing money is the least of my troubles. A loss never bothers me after I take it. I

forget it overnight. But being wrong — not taking the loss — that is what does

damage to the pocketbook and to the soul.

Reminiscences of a

Stock Operator

382

As far as my trading went, having a million merely meant more reserves. Money

does not give a trader more comfort, because, rich or poor, he can make mistakes

and it is never comfortable to be wrong. And when a millionaire is right his money

is merely one of his several servants.

Reminiscences of a

Stock Operator

381

Of course, if a man is wise and lucky, he will not make the same mistake twice. But

he will make any one of the ten thousand brothers or cousins of the original. The

Mistake family is so large that there is always one of them around when you want

to see what you can do in the fool-play line.

Reminiscences of a

Stock Operator

379

The recognition of our own mistakes should not benefit us any more than the study

of our successes. But there is a natural tendency in all men to avoid punishment.

When you associate certain mistakes with a licking, you do not hanker for a

second dose, and, of course, all stock market mistakes wound you in two tender

spots — your pocketbook and your vanity.

Reminiscences of a

Stock Operator

378

Well, I was worth over one million after the close of business that day. But my

biggest winnings were not in dollars but in the intangibles: I had been right, I had

looked ahead and followed a clear-cut plan. I had learned what a man must do in

order to make big money; I was permanently out of the gambler class; I had at last

learned to trade intelligently in a big way. It was a day of days for me.

Reminiscences of a

Stock Operator

377

That was the day I remember most vividly of all the days of my life as a stock

operator. It was the day when my winnings exceeded one million dollars.

Reminiscences of a

Stock Operator

376

I also had found out that nobody was immune from the danger of making sucker

plays. And for a sucker play a man gets sucker pay; for the paymaster is on the job

and never loses the pay envelope that is coming to you.

Reminiscences of a

Stock Operator

375

In short, I had learned that I had to work for my money. I was no longer betting

blindly or concerned with mastering the technique of the game, but with earning

my successes by hard study and clear thinking.

Reminiscences of a

Stock Operator

374

I still had much to learn but I knew what to do. No more floundering, no more half-

right methods. Tape reading was an important part of the game; so was beginning

at the right time; so was sticking to your position. But my greatest discovery was

that a man must study general conditions, to size them so as to be able to

anticipate probabilities.

Reminiscences of a

Stock Operator

373

The big men of the Street are as prone to be wishful thinkers as the politicians or

the plain suckers. I myself can't work that way. In a speculator such an attitude is

fatal. Perhaps a manufacturer of securities or a promoter of new enterprises can

afford to indulge in hope-jags.

Reminiscences of a

Stock Operator

372

The way to make money is to make it. The way to make big money is to be right at

exactly the right time. In this business a man has to think of both theory and

practice. A speculator must not be merely a student, he must be both a student

and a speculator.

Reminiscences of a

Stock Operator

371

What happened shows you that I am right in never trading at limits. Suppose I had

limited my selling price to 300? I'd never have got it off. No, sir! When you want to

get out, get out.

Reminiscences of a

Stock Operator

370

You ought to have seen that cornered stock, that it was sure suicide to go short of,

take a headlong dive when those competitive orders struck it. I let 'em have a few

thousand more. The price was 111 when I started selling it. Within a few minutes I

took in my entire short line at 92.

Reminiscences of a

Stock Operator

369

I was not pitting my tape-reading knack or my hunches against chance. The

inexorable logic of events was making money for me.

Reminiscences of a

Stock Operator

368

But I can tell you after the market began to go my way I felt for the first time in my

life that I had allies — the strongest and truest in the world: underlying conditions.

They were helping me with all their might. Perhaps they were a trifle slow at times

in bringing up the reserves, but they were dependable, provided I did not get too

impatient.

Reminiscences of a

Stock Operator

367

It was very curious how, after suffering tremendous losses from a break of fifteen

or twenty points, people who were still hanging on, welcomed a three point rally

and were certain the bottom had been reached and complete recovery begun.

Reminiscences of a

Stock Operator

366

If a man didn't make mistakes he'd own the world in a month. But if he didn't profit

by his mistakes he wouldn't own a blessed thing.

Reminiscences of a

Stock Operator

365

That is what happened. I didn't wait to determine whether or not the time was right

for plunging on the bear side. On the one occasion when I should have invoked the

aid of my tape-reading I didn't do it. That is how I came to learn that even when

one is properly bearish at the very beginning of a bear market it is well not to begin

selling in bulk until there is no danger of the engine back-firing.

Reminiscences of a

Stock Operator

364

I was too eager to prove to myself that I had seen real dollars and not a mirage. I

saw, and knew that I saw. Thinking about the reward for my excellent sight kept

me from considering the distance to the dollar-heap. I should have walked and not

sprinted.

Reminiscences of a

Stock Operator

363

If you begin right you will not see your profitable position seriously menaced; and

then you will find no trouble in sitting tight.

Reminiscences of a

Stock Operator

362

Thus I eventually discovered that it was all very well not to lose your bear position

in a bear market, but that at all times the tape should be read to determine the

propitiousness of the time for operating.

Reminiscences of a

Stock Operator

361 I have always found it profitable to study my mistakes.

Reminiscences of a

Stock Operator

360

I had made a mistake. But where? I was bearish in a bear market. That was wise. I

had sold stocks short. That was proper. I had sold them too soon. That was costly.

My position was right but my play was wrong.

Reminiscences of a

Stock Operator

359

It was a perfectly natural oversight. I had to pay the usual tuition — a good whack

per each step forward.

Reminiscences of a

Stock Operator

358

For years I had been the victim of an unfortunate combination of inexperience,

youth and insufficient capital. But now I felt the elation of a discoverer.

Reminiscences of a

Stock Operator

357

Obviously the thing to do was to be bullish in a bull market and bearish in a bear

market. Sounds silly, doesn't it? But I had to grasp that general principle firmly

before I saw that to put it into practice really meant to anticipate probabilities. It

took me a long time to learn to trade on those lines.

Reminiscences of a

Stock Operator

356

To be angry at the market because it unexpectedly or even illogically goes against

you is like getting mad at your lungs because you have pneumonia.

Reminiscences of a

Stock Operator

355

I do not allow my possessions — or my prepossessions either — to do my thinking

for me. That is why I repeat that I never argue with the tape.

Reminiscences of a

Stock Operator

354 My one steadfast prejudice is against being wrong.

Reminiscences of a

Stock Operator

353 I never want to buy stocks too cheap or too easily.

Reminiscences of a

Stock Operator

352

…the point is not so much to buy as cheap as possible or go short at the top

prices, but to buy or sell at the right time.

Reminiscences of a

Stock Operator

351

From then on I began to think of basic conditions instead of individual stocks. I

promoted myself to a higher grade in the hard school of speculation. It was a long

and difficult step to take.

Reminiscences of a

Stock Operator

350

I found when I got my reports that Ed Harding's kindly intentional interference cost

me forty thousand dollars. A low price for a man to pay for not having the courage

of his own convictions! It was a cheap lesson.

Reminiscences of a

Stock Operator

349

I have noticed that there is quite a difference between talking and trading. Some of

these chaps remind you of the bold clerk who talks to his cantankerous employer

as to a yellow dog — when he tells you about it.

Reminiscences of a

Stock Operator

348

The next day we got news of the San Francisco earthquake. It was an awful

disaster. But the market opened down only a couple of points. The bull forces were

at work, and the public is never independently responsive to news.

Reminiscences of a

Stock Operator

347

I have told some of these stories to friends, and some of them tell me it isn't a

hunch but the subconscious mind, which is the creative mind, at work. That is the

mind which makes artists do things without their knowing how they came to do

them. Perhaps with me it was the cumulative effect of a lot of little things

individually insignificant but collectively powerful.

Reminiscences of a

Stock Operator

346

I have been short one hundred thousand shares and seen a big rally coming. I

have figured — and figured correctly — that such a rally as I felt was inevitable,

and even wholesome, would make a difference of one million dollars in paper

profits. And I nevertheless have stood pat and seen half my paper profit wiped out,

without once considering the advisability of covering my shorts to put them out

again on the rally. I knew that if I did I might lose my position and with it the

certainty of a big killing. It is the big swing that makes the big money for you.

Reminiscences of a

Stock Operator

345

I can wait without a twinge of impatience. I can see a setback without being

shaken, knowing that it is only temporary.

Reminiscences of a

Stock Operator

344

Without faith in his own judgment no man can go very far in this game. That is

about all I have learned — to study general conditions, to take a position and stick

with it.

Reminiscences of a

Stock Operator

343

One of the most helpful things that anybody can learn is to give up trying to catch

the last eighth — or the first. These two are the most expensive eighths in the

world. They have cost stock traders, in the aggregate, enough millions of dollars to

build a concrete highway across the continent.

Reminiscences of a

Stock Operator

342

You have to use your brains and your vision to do this; otherwise my advice would

be as idiotic as to tell you to buy cheap and sell dear.

Reminiscences of a

Stock Operator

341

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody

can catch all the fluctuations. In a bull market your game is to buy and hold until

you believe that the bull market is near its end. To do this you must study general

conditions and not tips or special factors affecting individual stocks.

Reminiscences of a

Stock Operator

340

It is literally true that millions come easier to a trader after he knows how to trade

than hundreds did in the days of his ignorance.

Reminiscences of a

Stock Operator

339

Men who can both be right and sit tight are uncommon. I found it one of the

hardest things to learn. But it is only after a stock operator has firmly grasped this

that he can make big money.

Reminiscences of a

Stock Operator

338

And right here let me say one thing: After spending many years in Wall Street and

after making and losing millions of dollars I want to tell you this: It never was my

thinking that made the big money for me. It was always my sitting. Got that? My

sitting tight!

Reminiscences of a

Stock Operator

337

I think it was a long step forward in my trading education when I realized at last

that when old Mr. Partridge kept on telling the other customers, 'Well, you know

this is a bull market!' he really meant to tell them that the big money was not in the

individual fluctuations but in the main movements — that is, not in reading the tape

but in sizing up the entire market and its trend.

Reminiscences of a

Stock Operator

336

Time and again I heard him say, 'Well, this is a bull market, you know!' as though

he were giving you a priceless talisman wrapped up in a million-dollar accident

insurance policy. And of course I did not get his meaning.

Reminiscences of a

Stock Operator

335

It is naturally the semisucker who is always quoting the famous trading aphorisms

and the various rules of the game. He knows all the don'ts that ever fell from the

oracular lips of the old sages — excepting the principal one, which is: Don't be a

sucker!

Reminiscences of a

Stock Operator

334

The tyro knows nothing, and everybody, including himself, knows it. But the next,

or second, grade thinks he knows a great deal and makes others feel that way too.

He is the experienced sucker, who has studied — not the market itself but a few

remarks about the market made by a still higher grade of suckers.

Reminiscences of a

Stock Operator

333

They say you never grow poor taking profits. No, you don't. But neither do you

grow rich taking a four point profit in a bull market.

Reminiscences of a

Stock Operator

332 There was as much to learn from partial victory as there was from defeat.

Reminiscences of a

Stock Operator

331

It was the change in my own attitude toward the game that was of supreme

importance to me. It taught me, little by little, the essential difference between

betting on fluctuations and anticipating inevitable advances and declines, between

gambling and speculating.

Reminiscences of a

Stock Operator

330

I had to start much earlier if I wanted to catch the move in Fullerton's office. In

other words, I had to study what was going to happen; to anticipate stock

movements. That sounds asininely commonplace, but you know what I mean.

Reminiscences of a

Stock Operator

329

I was doing better than breaking even and that is why I didn't think there was any

need to deprive myself of the good things in life. The market was always there to

supply them. I was acquiring the confidence that comes to a man from a

professionally dispassionate attitude toward his own method of providing bread

and butter for himself.

Reminiscences of a

Stock Operator

328

I know now what I did not know then, and I think of the mistakes of my ignorance

because those are the very mistakes that the average stock speculator makes

year in and year out.

Reminiscences of a

Stock Operator

327

But not even a world war can keep the stock market from being a bull market when

conditions are bullish, or a bear market when conditions are bearish. And all a man

needs to know to make money is to appraise conditions.

Reminiscences of a

Stock Operator

325

There is what I call the behavior of a stock, actions that enable you to judge

whether or not it is going to proceed in accordance with the precedents that your

observation has noted. If a stock doesn't act right don't touch it; because, being

unable to tell precisely what is wrong, you cannot tell which way it is going. No

diagnosis, no prognosis. No prognosis, no profit.

Reminiscences of a

Stock Operator

324

After all, the game of speculation isn't all mathematics or set rules, however rigid

the main laws may be. Even in my tape reading something enters that is more than

mere arithmetic.

Reminiscences of a

Stock Operator

323

The average ticker hound — or, as they used to call him, tape-worm — goes

wrong, I suspect, as much from overspecialization as from anything else. It means

a highly expensive inelasticity.

Reminiscences of a

Stock Operator

322

There is nothing like losing all you have in the world for teaching you what not to

do. And when you know what not to do in order not to lose money, you begin to

learn what to do in order to win. Did you get that? You begin to learn!

Reminiscences of a

Stock Operator

321

The manager was a chap who looked as if he had been an actor or a stump

speaker. He was very impressive. He'd say good morning as though he had

discovered the morning's goodness after ten years of searching for it with a

microscope and was making you a present of the discovery as well as of the sky,

the sun and the firm's bank roll.

Reminiscences of a

Stock Operator

320

He figured that I was a permanent sucker, the ticker-hound kind that always plays

and always loses; a steady-income provider for brokers, whether they were the

kind that bucket your orders or modestly content themselves with the

commissions.

Reminiscences of a

Stock Operator

319

My old shotgun and BB shot could not do the work of a high power repeating rifle

against big game.

Reminiscences of a

Stock Operator

318

The ticker beat me by lagging so far behind the market… it seems so obvious now

that tape reading is not enough, irrespective of the brokers' execution, that I

wonder why I didn't then see both my trouble and the remedy for it.

Reminiscences of a

Stock Operator

317

It's the guessing that develops a man's brain power. Just consider what you have

to do to guess right.

Reminiscences of a

Stock Operator

316

If the unusual never happened there would be no difference in people and then

there wouldn't be any fun in life. The game would become merely a matter of

addition and subtraction. It would make of us a race of bookkeepers with plodding

minds.

Reminiscences of a

Stock Operator

315

Speculation is a hard and trying business, and a speculator must be on the job all

the time or he'll soon have no job to be on.

Reminiscences of a

Stock Operator

314

It took me five years to learn to play the game intelligently enough to make big

money when I was right.

Reminiscences of a

Stock Operator

313

My losses have taught me that I must not begin to advance until I am sure I shall

not have to retreat. But if I cannot advance I do not move at all.

Reminiscences of a

Stock Operator

312

I have heard of people who amuse themselves conducting imaginary operations in

the stock market to prove with imaginary dollars how right they are. Sometimes

these ghost gamblers make millions. It is very easy to be a plunger that way.

Reminiscences of a

Stock Operator

311

They say there are two sides to everything. But there is only one side to the stock

market; and it is not the bull side or the bear side, but the right side.

Reminiscences of a

Stock Operator

310 It takes a man a long time to learn all the lessons of his mistakes.

Reminiscences of a

Stock Operator

309 A stock operator has to fight a lot of expensive enemies within himself.

Reminiscences of a

Stock Operator

308

No man can always have adequate reasons for buying or selling stocks daily — or

sufficient knowledge to make his play an intelligent play.

Reminiscences of a

Stock Operator

307

There is a time for all things, but I didn't know it. And that is precisely what beats

so many men in Wall Street who are very far from being in the main sucker class.

There is the plain fool, who does the wrong thing at all times everywhere, but there

is the Wall Street fool, who thinks he must trade all the time.

Reminiscences of a

Stock Operator

306

If all I have is ten dollars and I risk it, I am much braver than when I risk a million, if

I have another million salted away.

Reminiscences of a

Stock Operator

305 That's all the fun there is — being right by using your own head.

Reminiscences of a

Stock Operator

304

It struck me at once that if my dope didn't work in practice there was nothing in the

theory of it to interest anybody.

Reminiscences of a

Stock Operator

303

Your business with the tape is now — not tomorrow. The reason can wait. But you

must act instantly or be left.

Reminiscences of a

Stock Operator

302

Another lesson I learned early is that there is nothing new in Wall Street. There

can't be because speculation is as old as the hills. Whatever happens in the stock

market today has happened before and will happen again.

Reminiscences of a

Stock Operator

301

My tremendous intuitive sense of the female creature informs me that you are

troubled. Jack Sparrow

300 Now... bring me that horizon. Jack Sparrow

299 Time to nut up or shut up. Zombieland

298

Vision is the greatest of talents, because it looks so much like magic. We see it in

sports, when a basketball player surprises an entire arena by delivering a last-

second pass to a waiting teammate. Or in business when a smart investor spots a

tiny, vital pattern and leverages it to a massive advantage. Vision dwarfs other

talents like accuracy, persistence, and strength because it operates on a higher

plane. It changes the game by creating new opportunities where none existed. Daniel Coyle

297

Myths and legends die hard in America. We love them for the extra dimension they

provide, the illusion of near-infinite possibility to erase the narrow confines of most

men's reality. Weird heroes and mould-breaking champions exist as living proof to

those who need it that the tyranny of 'the rat race' is not yet final. Hunter S. Thompson

296

The TV business is uglier than most things. It is normally perceived as some kind

of cruel and shallow money trench through the heart of the journalism industry, a

long plastic hallway where thieves and pimps run free and good men die like dogs,

for no good reason. Hunter S. Thompson

295

The Edge... there is no honest way to explain it because the only people who really

know where it is are the ones who have gone over. Hunter S. Thompson

294 Buy the ticket, take the ride. Hunter S. Thompson

293 When the going gets weird, the weird turn pro. Hunter S. Thompson

292

The history of every industrious and commercial community, under a stable

government, will present successive alternate periods of credit and distrust,

following each other with a good deal of regularity.

Encyclopedia

Americana, 1838

Edition

291

I write to keep from going mad from the contradictions I find among mankind —

and to work some of those contradictions out for myself. Michel de Montaigne

290

I'm beginning to think these are not perfect storms. I'm beginning to think these are

regular storms and we have a shitty boat. Jon Stewart

289 I make many changes, and reject and try again, until I am satisfied. Ludwig Van Beethoven

288

An excellent decision maker and a bad decision maker will both make mistakes.

The difference is what causes them to make mistakes and the frequency of their

mistakes. Ray Dalio

287

Intelligent people who are open to recognizing and learning from their mistakes

substantially outperform people with the same abilities who aren't open in the

same way. Yet it is far more common for people to let their egos stand in the way

of learning. Ray Dalio

286 If you don't mind being wrong on the way to being right, you will learn a lot. Ray Dalio

285

Recognize that you will certainly make mistakes; so will those around you and

those who work for you. And what matters is how you deal with them. If you treat

mistakes as learning opportunities that can yield rapid improvement if handled

well, you will be excited by them. Ray Dalio

284

There is no worse course in leadership than to hold out false hopes soon to be

swept away. Winston Churchill

283

Your ability to see the changing landscape and adapt is more a function of your

perceptive and reasoning abilities than your ability to learn and process quickly. Ray Dalio

282

It's not the strongest species that survive, nor the most intelligent, but those most

able to adapt. Charles Darwin

281

Of all the mysteries of the stock exchange there is none so impenetrable as why

there should be a buyer for everyone who seeks to sell. October 24, 1929 showed

that what is mysterious is not inevitable. Often there were no buyers, and only after

wide vertical declines could anyone be induced to bid ... Repeatedly and in many

issues there was a plethora of selling orders and no buyers at all.

John Kenneth

Galbraith

280

Volatility is greatest at turning points, and diminishes as a [new] trend is

established. George Soros

279 Trust, but verify. Damon Runyon

278

One of these days in your travels, a guy is going to come up to you and show you

a nice brand-new deck of cards on which the seal is not yet broken, and this guy is

going to offer to bet you that he can make the Jack of Spades jump out of the deck

and squirt cider in your ear. But, son, do not bet this man, for as sure as you are

standing there, you are going to end up with an earful of cider. Damon Runyon

277

The race is not always to the swift, nor the battle to the strong... but that's the way

to bet. Damon Runyon

276 Brick by brick, my citizens, brick by brick. Hadrian

275

Robust demand is the only thing that holds prices from falling vertically in the face

of eager selling. Overvalued, overbought, overbullish markets are often already

spent of that demand. John Hussman

274

Perhaps the single most important factor was that I had a great passion for the

game. I think almost anyone can be net profitable in the stock market given

enough time and effort, but to be a great trader, you have to have a passion for it.

You have to love trading. Mark Minervini

273

Everyone, from the greatest genius to the most ordinary clerk, has to adopt mental

frameworks that simplify and structure the information encountered in the world. Decision Traps

272 Seek simplicity, then distrust it.

Alfred North

Whitehead

271 Patience is required most when one desires to apply it least. Jack Sparrow

270

The truly skilled poker player — and all the more so the truly skilled trader — is not

just a fighter. He is also an artist, a statistician, and a student of human nature, all

rolled into one. Jack Sparrow

269

You must learn to allow patience and stillness to take over from anxiety and frantic

activity... The good player is patient. He is observant, controlling his patience, and

organizing his composure. When he sees an opportunity, he explodes. Jim Lau

268

There is no means of avoiding the final collapse of a boom expansion brought

about by credit expansion. The alternative is only whether the crisis should come

sooner as the result of a voluntary abandonment of further credit expansion, or

later as a final and total catastrophe of the currency system involved. Ludwig Von Mises

267 Where are the customers' yachts? Fred Schwed

266

Statistics are like bikinis. What they reveal is suggestive, but what they conceal is

vital. Aaron Levenstein

265

Nobody on Wall Street has a monopoly on truth. Market strategists don't. Money

managers and investment-newsletter writers don't. Brokers, financial planners and

insurance agents don't. Newpaper columnists don't. So treat all financial advice

with caution. Look at every investment and every investment strategy with

profound skepticism. Think long and hard about every financial myth. Jonathon Clements

264

Professional investment may be likened to those newspaper competitions in which

the competitors have to pick out the six prettiest faces from a hundred

photographs, the prize being awarded to the competitor whose choice most nearly

corresponds to the average preferences of the competitors as a whole; so that

each competitor has to pick, not those faces which he himself finds prettiest, but

those which he thinks likeliest to catch the fancy of the other competitors, all of

whom are looking at the problem from the same point of view. John Maynard Keynes

263

Investing on raw momentum — buying stocks that are going up, just because they

are going up — used to be considered as unsophisticated as picking your nose in

public. Now, many people consider it a legitimate school of investing. John Dorfman

262

It's almost as if we've seen the emergence of a new life form, the Robo-Trader, a

mutant strain of investor who grazes on information from CNBC and regurgitates it

in the form of online trades. Walter Updegrave

261

The tribe has spoken, and in accordance with the island's long-standing tradition,

the bears have again been banished. Louis Rukeyser

260

Progress does not march forward like an army on parade; it crawls on its belly like

a guerrilla. Michael Lewis

259

It was a Fred Flintstone kind of quarter. At times, it seemed like many stocks and

funds were just spinning their feet and wheels like Fred does whenever he peels

out in his Stone-Age sedan. Dan Culloton

258

For professional investors like myself, a sense of humor is essential . . . We are

very aware that we are competing not only against the market averages but also

against one another. It's an intense rivalry. Ralph Wanger

257 Don't be a hero. Don't have an ego. Paul Tudor Jones

256

The market has no respect for your station in life or for how smart an investor you

have been until now. In fact, the market in this incarnation most prefers to

humiliate those who remain smug or who appear to be telling it what to do and

when to do it. Tom Petruno

254

In bull markets, people have faith; in bear markets, doubt. The other way around

might be more profitable. James Grant

253 This sucker could go down. George W. Bush

251 Pigs get fat but hogs get slaughtered. Wall Street proverb

250 A rolling loan gathers no loss. Wall Street proverb

248

They promise the blessings of the Garden of Eden, but they plan to transform the

world into a gigantic post office. Every man but a subordinate clerk in a bureau.

What an alluring utopia! What a noble cause to fight! Ludwig Von Mises

247

Against all this frenzy of agitation there is but one weapon available: reason. Just

common sense is needed to prevent man from falling prey to illusory fantasies and

empty catchwords. Ludwig Von Mises

246 If I say it's safe to surf this beach, Captain, then it's safe to surf this beach! Colonel Kilgore

245 I love the smell of napalm in the morning. Colonel Kilgore

244

...for a certain group of cynics with a penchant for quality, the sound of a stock

crashing nicely will evoke a knowing and whimsical smile.

The Art of Short

Selling

243

To enjoy the advantages of a free market, one must have both buyers and sellers,

both bulls and bears. A market without bears would be like a nation without a free

press. There would be no one to criticize and restrain the false optimism that

always leads to disaster. Bernard Baruch

242

Bulls always have been more popular than bears in this country because optimism

is so strong a part of our heritage. Still, over-optimism is capable of doing more

damage than pessimism since caution tends to be thrown aside. Bernard Baruch

241

Bears can only make money if the bulls push up stocks to where they are

overpriced and unsound. Bernard Baruch

240 Life's a bitch... and she's back in heat. They Live

239 Never mistake a clear view for a short distance. Paul Saffo

238

Outside the limit of our sight, feeding off us, perched on top of us, from birth to

death, are our owners! Our owners! They have us. They control us! They are our

masters! Wake up! They're all about you! All around you! They Live

237 The world needs a wake up call, gentlemen... We're gonna phone it in. They Live

236 You... You look like your face fell in the cheese dip back in 1957. They Live

235 I've come here to chew bubblegum and kick ass... and I'm all out of bubblegum. They Live

234 If they're going to get my money, it'll be like getting nibbled to death by ducks. unknown

233

So let us then try to climb the mountain, not by stepping on what is below us, but to

pull us up at what is above us, for my part at the stars; amen. M.C. Escher

231

I believe that producing pictures, as I do, is almost solely a question of wanting so

very much to do it well. M.C. Escher

229 There has to be a certain enigma in it, which does not immediately catch the eye. M.C. Escher

228 We adore chaos because we love to produce order. M.C. Escher

226

I try in my prints to testify that we live in a beautiful and orderly world, not in a

chaos without norms, even though that is how it sometimes appears. M.C. Escher

224

What I give form to in daylight is only one per cent of what I have seen in

darkness. M.C. Escher

223 I don't grow up. In me is the small child of my early days. M.C. Escher

221 He who wonders discovers that this, in itself, is wonder. M.C. Escher

220 My work is a game, a very serious game. M.C. Escher

217

This is not my vessel. My vessel is magnificent, and fierce and huge-ish and gone.

Why is it gone? Jack Sparrow

214

When you marooned me on that god forsaken spit of land, you forgot one very

important thing mate: I’m Captain Jack Sparrow. Jack Sparrow

213

Worry about your own fortunes gentlemen. The deepest circle of hell is reserved

for betrayers and mutineers. Jack Sparrow

212

I think we've all arrived at a very special place. Spiritually, ecumenically,

grammatically. Jack Sparrow

211

The only rules that really matter are these: What a man can do and what a man

can't do. Jack Sparrow

210

It is of the highest importance, therefore, not to have useless facts elbowing out

the useful ones. Sherlock Holmes

209

Given the uncertain nature of the future, and thus the difficulty of being confident

your position is the right one—especially as price moves against you—it's

challenging to be a lonely contrarian. Howard Marks

208

Skepticism is the chastity of the intellect, and it is shameful to surrender it too soon

or to the first comer: there is nobility in preserving it coolly and proudly. George Santayana

207

You become a champion by fighting one more round. When things are tough, you

fight one more round. Gentleman Jim Corbett

206

It is the mark of an educated mind to be able to entertain a thought without

accepting it. Aristotle

205

There he goes. One of God's own prototypes. Some kind of high powered mutant

never even considered for mass production. Too weird to live, and too rare to die. Hunter S. Thompson

204

A good fight should be like a small play, but played seriously. A good martial artist

does not become tense, but ready; not thinking, yet not dreaming—ready for

whatever may come. When the opponent expands I contract and when he

contracts I expand, and when there is a moment to strike, I do not hit—it hits all by

itself. Bruce Lee

203

The great danger for most of us lies in not setting our aim too high and falling

short; but in setting our aim too low, and achieving our mark. Michelangelo

202 You can't stop the waves, but you can learn to surf. Jon Kabat-Zinn

201

First, you decide what you want specifically; and second, you decide if you're

willing to pay the price to make it happen, and then pay that price. Nelson Bunker Hunt

200

Winning is hard to do, and there's a price that you pay for it. And that's how I saw

Michael as a player — as someone that wanted to prove he's a winner every day. Scottie Pippen

199

The three most harmful addictions are heroin, carbohydrates, and a monthly

salary. Nassim Taleb

197

When one door closes, another opens; but we often look so long and so regretfully

upon the closed door that we do not see the one which has opened for us.

Alexander Graham

Bell

196 Everything comes to him who hustles while he waits. Thomas Edison

194 The best thinking has been done in solitude. The worst has been done in turmoil. Thomas Edison

193 A problem well stated is a problem half-solved. Charles Kettering

192

Concentrate all your thoughts upon the work at hand. The sun's rays do not burn

until brought to a focus.

Alexander Graham

Bell

191

Opportunity is missed by most people because it usually goes around wearing

overalls looking like hard work. Thomas Edison

190 Wisdom consists of seeing many things and concentrating on one thing. Dickson G. Watts

189 Seeing things in their right relation to each other is the highest vision. Dickson G. Watts

188

Many men have the 'courage of their opinions,' few the courage to abandon

opinions. Dickson G. Watts

187

Man begins in simplicity, advances to complexity, returns to simplicity. The last is

complexity reduced to the fewer terms. Dickson G. Watts

186 Learn principles. Facts will then fall into their relations and connections. Dickson G. Watts

185 Genius consists of seeing instantly the vital point. Dickson G. Watts

184 Fools try to prove that they are right. Wise men try to find when they are wrong. Dickson G. Watts

183 Don't storm the fortress of fortune—lay siege to it. Dickson G. Watts

182

If only we could be like water. When water moves, it follows the path of least

resistance. Water would be good at poker. Tommy Angelo

181

If you have an inflexible image in your mind of an opponent, then whenever he

changes, your evaluation of him will be wrong. If you have an inflexible image in

your mind of yourself, then whenever you change, your evaluation of yourself will

be wrong. For up-to-date evaluation, there is no time but the present. Tommy Angelo

180

If we carry in our mind a false image of ourselves, and that image gives us

confidence, and the confidence itself increases the probability that we will

procreate, then it doesn't matter that the image is false. Delusion will be naturally

selected. Tommy Angelo

179 A good anticipator foresees all pertinent paths without attaching to any of them. Tommy Angelo

178

Because your own strength is unequal to the task, do not assume that it is beyond

the powers of man; but if anything is within the powers and province of man,

believe that it is within your own compass also. Marcus Aurelius

176

They who can give up essential liberty to obtain a little temporary safety, deserve

neither liberty nor safety. Benjamin Franklin

175

Politics is the art of looking for trouble, finding it everywhere, diagnosing it

incorrectly, and applying the wrong remedies. Groucho Marx

174

I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26

times, I've been trusted to take the game winning shot and missed. I've failed over

and over and over again in my life. And that is why I succeed. Michael Jordan

173

I loved the night. I think secretly all scientists exult in working alone, surrounded by

the urgent private quiet of the dark. To be doing something no one had ever

done... to be alone and out on the edge like that, there was no feeling like it in the

world. Steven Rosenberg

172

Nothing in the world can take the place of Persistence. Talent will not; nothing is

more common than unsuccessful men with talent. Genius will not; unrewarded

genius is almost a proverb. Education will not; the world is full of educated

derelicts. Persistence and determination alone are omnipotent. Calvin Coolidge

171

A common mistake that people make when trying to design something completely

foolproof is to underestimate the ingenuity of complete fools. Douglas Adams

170 The higher we soar, the smaller we appear to those who cannot fly. Friedrich Nietzsche

169

If we did all the things we were capable of doing, we would literally astound

ourselves. Thomas Edison

168 Talent hits a target no one else can hit; Genius hits a target no one else can see. Arthur Schopenhauer

167

Maybe, just once, someone will call me 'Sir' without adding, 'You're making a

scene.' Homer J. Simpson

166

Twenty years from now you will be more disappointed by the things that you didn't

do than by the ones you did do. So throw off the bowlines. Sail away from the safe

harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain

165

The market is a mathematical hypothesis. The best solutions to it are the elegant

and the simple. George Soros

164

I knew that if I ever went broke at poker, it wouldn't be because my best wasn't

good enough to keep me afloat. It'd be because my worst was bad enough to sink

me. Tommy Angelo

163

The best way to get better at poker is to get better at everything and let poker rise

with the tide. Tommy Angelo

162

I learned to approach racing like a game of billiards. If you bash the ball too hard,

you get nowhere. As you handle the cue properly, you drive with more finesse. Juan Manuel Fangio

161 Nothing is more difficult, and therefore more precious, than to be able to decide. Napoleon

160 Well-bred instinct meets reason halfway. George Santayana

159

One machine can do the work of 50 ordinary men. No machine can do the work of

one extraordinary man. Elbert Hubbard

158

Excellence is an art won by training and habituation. We do not act rightly because

we have virtue or excellence, but we rather have those because we have acted

rightly. Excellence, then, is not an act, but a habit. Aristotle

157

Intuition and concepts constitute... the elements of all our knowledge, so that

neither concepts without an intuition in some way corresponding to them, nor

intuition without concepts, can yield knowledge. Immanuel Kant

156

There is no logical way to the discovery of these elemental laws. There is only the

way of intuition, which is helped by a feeling for the order lying behind the

appearance. Albert Einstein

155 Nothing is more intolerable than to have to admit to yourself your own errors. Ludwig Van Beethoven

154 Intuition will tell the thinking mind where to look next. Jonas Salk

153

The intuitive mind is a sacred gift and the rational mind is a faithful servant. We

have created a society that honors the servant and has forgotten the gift. Albert Einstein

152 Genius is infinite patience. Michelangelo

151 Rare is the blessing that bears no resemblance to curse. Jack Sparrow

150

Whoever undertakes to set himself up as a judge of Truth and Knowledge is

shipwrecked by the laughter of the gods. Albert Einstein

149

A lie gets halfway around the world before the truth has a chance to get its pants

on. Winston Churchill

148

So long as I am acting from duty and conviction, I am indifferent to taunts and

jeers. I think they will probably do me more good than harm. Winston Churchill

147

Continuous effort—not strength or intelligence—is the key to unlocking our

potential. Winston Churchill

146

There are three classes of people: those who see, those who see when they are

shown, those who do not see. Leonardo da Vinci

145 The truth of things is the chief nutriment of superior intellects. Leonardo da Vinci

144 The noblest pleasure is the joy of understanding. Leonardo da Vinci

143 The greatest deception men suffer is from their own opinions. Leonardo da Vinci

142

I have been impressed with the urgency of doing. Knowing is not enough; we must

apply. Being willing is not enough; we must do. Leonardo da Vinci

141

He who loves practice without theory is like the sailor who boards ship without

rudder and compass, and never knows where he may cast. Leonardo da Vinci

140

Anyone who conducts an argument by appealing to authority is not using his

intelligence; he is just using his memory. Leonardo da Vinci

139

Existence is a strange bargain. Life owes us little; we owe it everything. The only

true happiness comes from squandering ourselves for a purpose. William Cowper

137 The empires of the future are the empires of the mind. Winston Churchill

136

It is a mistake to look too far ahead. Only one link in the chain of destiny can be

handled at a time. Winston Churchill

135 Out of intense complexities, intense simplicities emerge. Winston Churchill

134

The whole history of civilization is strewn with creeds and institutions which were

invaluable at first and deadly afterwards. Walter Bagehot

133 Every time history repeats itself, the price goes up. unknown

132 By doubting, we come to examine, and by examining, so we perceive the truth. Peter Abelard

129 He who desires but acts not, breeds pestilence. William Blake

128 I must create a system or be enslaved by another man's. William Blake

127

Mediocre people are always at their best; they climb molehills without breaking a

sweat. unknown

126 A true craftsman never stands for wrinkles in the duct tape. unknown

123

A man is not idle because he is absorbed in thought. There is a visible labor and

there is an invisible labor. Victor Hugo

122 Believe that life is worth living and your belief will help create the fact. William James

121 All life is an experiment. Oliver Wendell Holmes

120

In times of drastic change, it is the learners who inherit the future. The learned

usually find themselves equipped to live in a world that no longer exists. Oliver Wendell Holmes

119 Things which matter most must never be at the mercy of things which matter least.

Johann Wolfgang von

Goethe

118 Your pain is the breaking of the shell that encloses your understanding. Khalil Gibran

117

One doesn't discover new lands without consenting to lose sight of the shore for a

very long time. Andre Gide

116 The winds and waves are always on the side of the ablest navigators. Edward Gibbon

115 I love it when a plan comes together. The A-Team

114 You shall judge a man by his foes as well as his friends. Joseph Conrad

113

I had ambition not only to go farther than any man had ever been before, but as far

as it was possible for a man to go. Joseph Conrad

112

To have his path made clear for him is the aspiration of every human being in our

beclouded and tempestuous existence. Joseph Conrad

111 It is the mark of an inexperienced man not to believe in luck. Joseph Conrad

110

I don't like work. But I like what is in work—the chance to find yourself. Your own

reality—for yourself, not for others—which no other man can ever know. Joseph Conrad

109

All men dream: but not equally. Those who dream by night in the dusty recesses of

their minds wake in the day to find that it was vanity; but the dreamers of the day

are dangerous men, for they may act their dreams with open eyes, to make it

possible. T.E. Lawrence

108

The credit belongs to the man who is actually in the arena; whose face is marred

by dust and sweat and blood; who strives valiantly… who knows the great

enthusiasms, the great devotions, and spends himself in a worthy cause; who, at

best, knows the triumph of high achievement; and who, at the worst, if he fails, at

least fails while daring greatly, so that his place shall never be with those cold and

timid souls who know neither victory nor defeat. Teddy Roosevelt

107

Mountains should be climbed with as little effort as possible and without desire.

The reality of your own nature should determine the speed. If you become restless,

speed up. If you become winded, slow down. You climb the mountain in an

equilibrium between restlessness and exhaustion. Then, when you're no longer

thinking ahead, each footstep isn't just a means to an end but a unique event in

itself. Robert Pirsig

106

To live only for some future goal is shallow. It's the sides of the mountain which

sustain life, not the top. Here's where things grow. But of course, without the top

you can't have any sides. It's the top that defines the sides. Robert Pirsig

105

There is only one thing for it then—to learn. Learn why the world wags and what

wags it. That is the only thing which the mind can never exhaust, never alienate,

never be tortured by, never fear or distrust, and never dream of regretting.

The Once and Future

King

104

Within their areas of competence, experts have many more categories of

awareness than novices. The perception of subtleties is what Michael Jordan,

Warren Buffett, and Yo-Yo Ma have in common. Lee Humphries

103 Specialization is for insects. Robert A. Heinlein

102

The height of cultivation is really nothing special. It is merely simplicity; the ability

to express the utmost with the minimum. It is the halfway cultivation that leads to

ornamentation. Bruce Lee

101

Democracy is the theory that the common people know what they want and

deserve to get it good and hard. H.L. Mencken

100 Every decent man is ashamed of the government he lives under. H.L. Mencken

98

When once you have tasted flight, you will forever walk the earth with your eyes

turned skyward, for there you have been and there you will always long to return. Leonardo da Vinci

97

A bureaucrat is the most despicable of men, though he is needed as vultures are

needed, but one hardly admires vultures whom bureaucrats so strangely resemble.

I have yet to meet a bureaucrat who was not petty, dull, almost witless, crafty or

stupid, an oppressor or a thief, a holder of little authority in which he delights, as a

boy delights in possessing a vicious dog. Who can trust such creatures? Cicero

96

The bravest are surely those who have the clearest vision of what is before them,

glory and danger alike, and yet notwithstanding, go out to meet it. Thucydides

95

The society that separates its scholars from its warriors will have its thinking done

by cowards and its fighting by fools. Thucydides

94

Those who make wise decisions are more formidable to their enemies than those

who rush madly into strong action. Thucydides

91

I don't know half of you half as well as I should like; and I like less than half of you

half as well as you deserve. Bilbo Baggins

89

Dark forces dragged me away from the keyboard, swirling forces of irresistible

intensity and power. Boris Johnson

87

For a sucessful technology, honesty must take precedence over public

relations—for nature cannot be fooled. Richard Feynman

86

There's no sense being exact about something if you don't even know what you're

talking about. John von Neumann

85

Good judgment comes from experience, and experience comes from bad

judgment. Fred Brooks

84 I have always found that plans are useless, but planning is indispensable. Dwight D. Eisenhower

83

The ability to simplify means to eliminate the unnecessary so that the necessary

may speak. Hans Hoffman

82 Simplicity is the ultimate sophistication. Leonardo da Vinci

81

Increasingly, people seem to misinterpret complexity as sophistication, which is

baffling — the incomprehensible should cause suspicion rather than admiration.

Possibly this trend results from a mistaken belief that using a somewhat

mysterious device confers an aura of power on the user. Niklaus Wirth

80 Never ascribe to malice that which is adequately explained by incompetence. Napoleon

79

My friends, as I have discovered myself, there are no disasters, only opportunities.

And, indeed, opportunities for fresh disasters. Boris Johnson

78

Suppose you were an idiot. And suppose you were a member of Congress. But I

repeat myself. Mark Twain

77

The most costly of all follies is to believe passionately in the palpably not true. It is

the chief occupation of mankind. H.L. Mencken

76

It is not materialism that is the chief curse of the world, as pastors teach, but

idealism. Men get into trouble by taking their visions and hallucinations too

seriously. H.L. Mencken

75

The secret of joy in work is contained in one word — excellence. To know how to

do something well is to enjoy it. Pearl S. Buck

74

A newspaper is a device for making the ignorant more ignorant and the crazy

crazier. H.L. Mencken

73 For every complex problem, there is a solution that is neat, simple, and wrong. H.L. Mencken

72 It is the dull man who is always sure, and the sure man who is always dull. H.L. Mencken

71

A child-like man is not a man whose development has been arrested; on the

contrary, he is a man who has given himself a chance of continuing to develop

long after most adults have muffled themselves in the cocoon of middle-aged habit

and convention. Aldous Huxley

70

Be formless… shapeless, like water. If you put water into a cup, it becomes the

cup. You put water into a bottle; it becomes the bottle. You put it into a teapot; it

becomes the teapot. Water can flow, and it can crash. Be like water my friend. Bruce Lee

69

He who joyfully marches to music in rank and file has already earned my

contempt. He has been given a large brain by mistake, since for him the spinal

cord would fully suffice. Albert Einstein

68

The most exciting phrase to hear in science, the one that heralds new discoveries,

is not 'Eureka!' but 'That's funny…' Isaac Asimov

67

After a certain high level of technical skill is achieved, science and art tend to

coalesce in aesthetics, plasticity, and form. The greatest scientists are artists as

well. Albert Einstein

66

It is nothing short of a miracle that the modern methods of education have not yet

entirely strangled the holy curiosity of inquiry… It is a very grave mistake to think

that the enjoyment of seeing and searching can be promoted by means of coercion

and a sense of duty. Albert Einstein

65 Great spirits have always encountered violent opposition from mediocre minds. Albert Einstein

64

The pursuit of truth and beauty is a sphere of activity in which we are permitted to

remain children all our lives. Albert Einstein

63

Only two things are infinite, the universe and human stupidity, and I'm not sure

about the former. Albert Einstein

62

All that is valuable in human society depends upon the opportunity for

development accorded the individual. Albert Einstein

61 The important thing is to never stop questioning. Albert Einstein

60

I would not give a fig for the simplicity this side of complexity, but I would give my

life for the simplicity on the other side of complexity. Oliver Wendell Holmes

59

We are drowning in information, while starving for wisdom. The world henceforth

will be run by synthesizers, people able to put together the right information at the

right time, think critically about it, and make important choices wisely. E.O. Wilson

58

Sometimes a concept is baffling not because it is profound, but because it is

wrong. E.O. Wilson

56

In a purely technical sense, each species of higher organism is richer in

information than a Caravaggio painting, Bach fugue, or any other great work of art. E.O. Wilson

55 The wolf careth not, how many the sheep be. Virgil

54 A society of sheep must in time beget a government of wolves. Bertrand de Jouvenel

53 Simplify, simplify, simplify. Henry David Thoreau

52 Things should be made as simple as possible, but not simpler. Albert Einstein

51 A mind all logic is like a knife all blade. Chinese proverb

50 So I got that goin' for me, which is nice. Caddyshack

49

Tiger got to hunt, bird got to fly; Man got to sit and wonder, 'Why, why, why?' Tiger

got to sleep, bird got to land; Man got to tell himself he understand. Cat's Cradle

48

Following the dictates of experience may possibly fool you, now and then. But not

following them invariably makes an ass out of you.

Reminiscences of a

Stock Operator

47

There are men whose gait is far quicker than the mob's. They are bound to

lead—no matter how much the mob changes.

Reminiscences of a

Stock Operator

46

So in the case of those who are skilled in attack, their opponents do not know

where to defend. In the case of those skilled in defense, their opponents do not

know where to attack. Sun Tzu

45 The reverse side also has a reverse side. Japanese proverb

44

My approach works not by making valid predictions, but by allowing me to correct

false ones. George Soros

43

It's not whether you're right or wrong that's important, but how much money you

make when you're right, and how much you lose when you're wrong. George Soros

42

The biggest secret about success is that there isn't any big secret about it, or if

there is, then it's a secret from me, too. The idea of searching for some secret for

trading success misses the point. Ed Seykota

41

It requires a great deal of boldness, and a great deal of caution, to make a great

fortune. Nathan Rothschild

40

Markets are no different than empires. They expand, rise in value, become over-

extended, and eventually collapse. Marc Faber

39 Every path chosen precludes an infinite number of alternative paths. Jack Sparrow

38 Drink up me hearties, yo ho... Jack Sparrow

37

When the speed of rushing water reaches the point where it can move boulders,

this is the force of momentum. When the speed of a hawk is such that it can strike

and kill, this is precision. So it is with skillful warriors — their force is swift, their

precision is close. Sun Tzu

36

The way to make money is to make it. The way to make big money is to be right at

exactly the right time. In this business a man has to think of both theory and

practice. A speculator must not be merely a student, he must be both a student

and a speculator.

Reminiscences of a

Stock Operator

34

Human subtlety will never devise an invention more beautiful, more simple, or

more direct than does nature… in her inventions nothing is lacking, and nothing is

superfluous. Leonardo da Vinci

33

Although nature commences with reason and ends in experience, it is necessary

for us to do the opposite—that is, to commence with experience, and from this

proceed to investigate the reason. Leonardo da Vinci

32

I love those who can smile in trouble, who can gather strength from distress, and

grow brave by reflection. 'Tis the business of little minds to shrink, but they whose

heart is firm, and whose conscience approves their conduct, will pursue their

principles unto death. Leonardo da Vinci

31

It had long since come to my attention that people of accomplishment rarely sat

back and let things happen to them. They went out and happened to things. Leonardo da Vinci

30

Iron rusts from disuse; water loses its purity from stagnation... even so does

inaction sap the vigor of the mind. Leonardo da Vinci

29

In rivers, the water that you touch is the last of what has passed and the first of

that which comes; so with present time. Leonardo da Vinci

28

Life is pretty simple: You do some stuff. Most fails. Some works. You do more of

what works. If it works big, others quickly copy it. Then you do something else. The

trick is the doing something else. Tom Peters

27 If you can't explain it to a six year old, you don't really understand it. Richard Feynman

26

I can live with doubt and uncertainty and not knowing. I think it is much more

interesting to live not knowing than to have answers that might be wrong. Richard Feynman

24

Learn from science that you must doubt the experts. As a matter of fact, I can also

define science another way: Science is the belief in the ignorance of experts. Richard Feynman

23

The first principle is that you must not fool yourself, and you are the easiest person

to fool. Richard Feynman

22

We have found it of paramount importance that, in order to progress, we must

recognize our ignorance and leave room for doubt. Richard Feynman

21

You can know the name of a bird in all the languages of the world, but when you're

finished, you'll know absolutely nothing whatever about the bird… So let's look at

the bird and see what it's doing—that's what counts. I learned very early the

difference between knowing the name of something and knowing something. Richard Feynman

20

Not only have experts gathered many 'elemental' facts about their field; they have

linked them to one another to produce a vast array of 'relational' facts... It is these

latent relationships that the mind processes in its search for insight. The

processing is autonomous and subliminal, but you can encourage it. Reflection

compounds knowledge. Lee Humphries

19 Funny old world innit? Jack Sparrow

18 Take what you can... give nothin' back. Jack Sparrow

17 History doesn't repeat, but sometimes it rhymes. Mark Twain

13 Those who forget history are condemned to repeat it. George Santayana

12

The world is perpetual caricature of itself; at every moment it is the mockery of

what it is pretending to be. George Santayana

11 Ninety percent of any great trader is going to be the risk control. Paul Tudor Jones

10 Nobody ever went bowlegged carrying away the money they won from me. Canada Bill Jones

9 A Smith and Wesson beats four aces. Canada Bill Jones

8 And that, my liege, is how we know the earth to be banana-shaped. Monty Python

7

Every now and then go away, have a little relaxation, for when you come back to

your work your judgment will be surer. Go some distance away, because then the

work appears smaller... more of it can be taken in at a glance, and a lack of

harmony and proportion is more readily seen. Leonardo da Vinci

6 I am turned into a sort of machine for observing facts and grinding out conclusions. Charles Darwin

5 If all the economists were laid end to end, they would never reach a conclusion. George Bernard Shaw

3 The four most dangerous words in investing are This time its different. John Templeton

1 An investment in knowledge always pays the best interest. Benjamin Franklin