There are those who would convince you that it is somehow smart or in
your best interest to be manically switching your investments around,
back and forth, long and short, on a daily basis. To pay attention to
this kind of overstimulation is the height of madness, even for
professional traders.
The most storied and important trader who
ever lived, Jesse Livermore, would be tuning these daily buy and sell
calls out were he alive and operating today. Because while he was a
trader, he was not of the mindset that there was always some kind of
action to be taking.
Jesse Livermore’s legacy is a bit of a double-edged sword…
On
the one hand, he was the first to codify the ancient language of supply
and demand that is every bit as relevant 100 years later as it was when
he first relayed it to biographer Edwin Lefèvre. Livermore himself sums
it up thusly:
“I learned early 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. I’ve never forgotten that.”
On the other hand,
Livermore’s undoing came at precisely the moments in which he ignored
his own advice. After repeated admonitions about tipsters, for example,
Jesse allowed a tip on cotton to lead to a massive loss which grew even
larger as he sat on it – violating yet another of his own cardinal
rules.
And of course,
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