It reminds me that I’m not interested in speculating but in investing, which he doesn’t say much about. Even on speculation, there aren’t quite as many clues as I’d like. For example how does he know we’re in a bull market and then that we’re no longer in a bull market? How can he tell which jumps indicate something and which don’t?

I really like what he has to say about tips (never trust them, no matter the source). Very convincing, and I’m sure that hasn’t changed over the last century. (News, such as earthquakes and droughts, do not count as “tips.” You can certainly make good guesses about how supply and demand might change based on some news sources.)

However, I’m surprised that JD is recommending a book that is often preached as a gospel for how to trade investments actively rather than passively!

Also, you will realise that the principles which JD emphasises can be learnt very effectively using poker as a training tool – indeed some of the points bear an eerie resemblance to the lessons of Kenny Roger’s iconic ballad “The Gambler”!

Perhaps the biggest lesson of them all is that of sitting and not thinking. Resisting the urge to play a hand of poker is like resisting the urge to make a snap investment – hard to do but usually well worth the effort.

Congratulations on the office space, J.D. You look cozy.

Lessons learned…BUY AND HOLD! Unless you have “insider information” its very difficult to consistently beat the stock market through speculation!

This quote highlights for me the dominance of emotion over intellect as factors affecting investing success. Intellect can be a plus. But getting the emotions right is more important. And, when you don’t get the emotions right, a strong intellect can actually be a negative (because the wrong emotions will cause the investor to put the strong intellect to work rationalizing bad decisions.

Take a look at any money magazine and note the focus of the articles on investing. Four out of five of the articles will focus on matters of intellect rather than matters of emotion.

There are too many who have not yet taken Livermore’s message to heart, in my view.

Rob

As an aside (I don’t think this is detailed in the book): Livingston made and lost huge fortunes on four separate occasions, after going busto the last time he committed suicide. Which, to me, demonstrates how difficult it is to control your emotions (even when you’ve BTDT four times).