Ideas that spread

Not all great investing/trading ideas are profitable. Ideas that spread are. If no one else sees what you see and acts, you can’t make money. Hoping that eventually the rest of the market will understand and embrace your thesis is a loser’s strategy or a privilege for someone with very deep pockets. Markets often know more than you as they constantly try to discount all the available public and private information. You might be convinced that your analysis is right and the market is wrong, but it could remain wrong longer than you could remain solvent. The question again is do you have deep enough pockets to ride the storm out and aren’t there more plausible alternatives for your capital at the time. Smart people like to scale in and out of positions, knowing that no one can consistently pick tops and bottoms.

Take for example Jim Rogers. He is a typical contrarian investor, who likes to buy low and sell high. But he is not buying anything that is low priced and neglected. He buys cheap things only when he sees a fundamental change on the horizon – a catalyst that will help other market participants to re-evaluate their thesis and act on their new observations.

Yra Harris on Picking your sweet spot

Anytime something is too good to be true, I now recognize that it probably is and that it is there for a reason because somebody knows more than me. Where I used to rush in, I now step back a wait for a move to develop. I don’t feel I have to be at the start of every move anymore. Money is always flowing somewhere no matter what, so I just have to stay attuned to it.

Markets are changing all the time

You have to have the ability to change and see how the markets are changing and adapt to it. That’s a constant process. That’s why I think you see some people do well for four or five years and then just disappear.

History can be a useful benchmark but only if everything  is put into the right context. Markets are dynamic and people’s reactions are different. It is much more subtle and nuanced than looking at what happened the last time.

Cristian Siva-Jothy

No setup works all the time and in all types of market environment. The success rate of any setup fluctuates in cycles – there are periods when it is high and periods when it is low. Most successful speculators have specialized in a small number of setups. The question is, do you change when the market dynamics change and do you adapt new setups or do you wait for the proper market environment to come back before you risk any money?