A Course in Moneymaking: Can "Good Investing" Be Taught?

This morning we explore an outline of how I’ve come up with a trading approach that I am willing to commit some real money to. 

Not that I expect to become overnight “rich” by doing so, but after almost 50-years of interviewing financial experts and a ton of personal learning, I’ve come to the conclusion that making money in the markets is not really all that tough.

What IS tough is the personality aspect of investing.

So this morning we begin with what could easily turn into a book-length discussion because I want to try and pull together a lot of different investment concepts into some kind of “whole cloth” that will make sense both to the professional investor, as well as the person who doesn’t have the 50-years it has taken me to gather all this.

In the end,  we find some “rules of money” and about “rules of investment” and basics of several kinds of “technical analysis.”  But the toughest enemy of all in life – and investing – is ourselves.

After some headlines and coffee, and the ChartPack, of course, I’ll tell you what my personal Book of Truth is all about….

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Comments

A Course in Moneymaking: Can "Good Investing" Be Taught? — 12 Comments

  1. Any thoughts on the rumor that China plans to introduce a gold-backed yuan on April 19th?

    Could this be why we are seeing emergency Fed meetings, Obama meeting with Yellen, as well as with the CIA? Russian fighter jets buzzing a US Navy ship?

    Is it time to ‘hide under the bed with the dust bunnies’?

    http://beforeitsnews.com/china/2016/04/quayle-alert-heads-up-april-19th-china-has-announced-gold-backed-yuan-on-this-date-will-this-announcement-sync-with-all-the-warnings-concerning-pending-terror-attacks-2452643.html

  2. I read the article in the Examiner regarding using fake/stolen SS numbers by illegal aliens. I think I understand the motivation by both sides, and while using a stolen number is not legitimate, that crime has already been committed and the IRS is providing a path to avoid committing another crime – failure to pay taxes or file a return.

    I do believe that the IRS should under NO circumstances allow a refund here, though the illegal alien is properly identified by using his ITN on the return. The improper SSN was only used to get the job illegally, and convince the employer that he was legal. The IRS wants to collect from the illegal aliens and that’s fine as far as it goes. They should avoid any refunds to them though.

    The question of whether or not to inform the employer is moot – the SSA does that anyway, though with a year’s delay. I don’t see a clear path here unless there’s a way to deal with the illegal aliens both compassionately and effectively, so that they will quit coming here under the delusion that they are welcome, and we can start sorting out who is legitimate, or not. Letting the illegal aliens jump the line is a serious disservice to those who have worked and waited for years for the same opportunity, and believe me, those legitimate immigrant aliens and those who have become citizens are not amused.

    This is a hard problem deserving of a proper solution, and building a fence/wall/other that is a clear and convincing indication that illegal entry is punishable would be the first step.

    Without political will, nothing good will happen.

      • Thanks for the thought!

        I value my privacy, freedom and autonomy too much and really don’t enjoy a fight, though I’ll do what’s necessary. I’d be glad to advise a worthy person if they found my opinion to be of value.

        If I had the social skills of Trump and a wife like Melania to work and play with, I might reconsider.

  3. Great write here this morning Thanks. If the money pump continues when does it fall ? This market has been false for years Laws are not followed we are in a narrow place controlled by establishment of thieves

    • The market is false in that it has “extra value” offered through margin credit and the money maker involvement in share pricing. You could call it “shill bidding” on momentum favorites. Day traders add to the mix. All one has to do is look at the eventual drop that hit LNKD the last earnings announcement they had. Or go back 14 years and see the hype in Fuel Cell stocks (PLUG, BLDP, etc.)

      The market is not value based and so it becomes what many call it “a casino” where value stocks lose out to hyped up no-earnings stocks in terms of interest, gains and success.

      The laws of the market are new laws – they just are not just and balanced laws. So, enter wisely. If you read zerohedge – you would think the market should be zero any day now. So, the market goes up partly because so many feel it should be going down. The law of “should” does not work there.

  4. I think the most effective investors are “ahead of the rules” or perhaps “make the rules”. It may be why derivatives investing is so active and lucrative. Why invest in 5% dividend stocks when you can make a 5% daily trade on a liquid option… But is that truly “good” investing or a form of gambling that itself becomes a risk.

    There’s a company out of Chicago that puts on a web show about investing. Won’t name it but their motto is “trade small, trade often” and they try to teach what may be good investing (and it can sure generate broker fees). However, when I watch them, they sometimes get into trouble following some animal instincts rather than the rules they try to teach. So, maybe good investing is the type of investing that you can sleep at night without worry.

    I’m at the point now where I would say: Give me 5% annual growth guaranteed for 10 years and I will put my whole investment package in it. That would be good investing. Sure, we may have a bit if inflation but I could sleep at night far better.

    What isn’t good investing is a burning stomach worrying about China (Jan/Feb and Aug 2015) and then seeing it race away from that demise into some new “blowoff top” that Mr. Ure has predicted and may be happening. Who’s in charge of all this? Valuation doesn’t seem to be. Momentum and “hot trends” rule the day.

    My #1 rule has become: “Don’t get emotional – it leads to confirmation bias”

  5. “IRS chief: Agency encourages illegal immigrant theft of SSNs to file tax returns”

    And to think I had made the decision to follow my wife’s rules today and.
    ” KEEP YOUR G&D D%MN OPINIONS TO YOURSELF”
    Phew.. reminds me of the eighties.. Reagan just came up with the huge giveaway tax program of Earned Income Credit… You couldn’t buy a full time job with benefits back then.. the one full time job I had gave me what ten twenty hours a week tops if I was lucky before reagan you could work one job and earn enough to live on ( and everyone had insurance )after reagan got in and started to export our jobs (you never seen health insurance after that only a few got it ) you had to work two plus jobs to survive at average wages.. so I had to work night and day to make enough money for us to survive..
    At one of my many hat jobs.. they had a few refugee’s working..one of the guys put there through refugee placement and I became really good friends.. he had several kids and a wife.. when he came to the USA they got him the job.( guaranteed him enough hours so he only had to work the one.. Yup you guessed it right where I was working) and they got him a house paid his housing costs got him assistance for his utilities and food stamps because he had so many kids.( the vast majority of those getting assistance are extremely low income and have children or elderly which doesn’t bother me since in the early eighties the food stamp went from a releif program to a job wage equalization program ) anyway that didn’t bother me.. but he also got the medicaid which an american citizen on it doesn’t usually get to keep unless there is special circumstances.. ( at least in this state) for longer than three months and not just for his kids but for him and his wife besides..
    Anyway.. I was slightly jealous since I had to sacrifice my family to work day and night live with an egg timer so I could deep relax during breaks etc..tax time came…
    because I worked part time jobs they didn’t deduct enough. ( yup you guessed it to spur the economy one brilliant Idea that everyone came up with was charge the same tax but recalculate the way they collect it.. an extra five bucks in you paycheck..if your low wage you will spend it. guaranteed)
    So I had to pay in….. Now my friend.. he showed me his check.. he got the EIC tax credit.. He got back what he paid in for social security and income tax , Medicare, He got back what the company paid in his return check was more than I grossed working day and night.. Now I don’t mind someone that comes here to raise a family.. but they shouldn’t be allowed any of those benefits that are set up for the citizens of the usa till they become citizens of our country..Until then they should have to pay in all the appropriate taxes and a non resident tax to allow them to live here..so am I a little one sided on this issue.. yes..

    • Why do you think (our??) country’s deficit has gone through the roof?
      Bulletins are the only answers ;-(

    • I wonder if I could get permission to copy your letter, and send it to my congresspeople.
      BTW- in the last month or two, I’d read an article where the difference between someone( with family) making 60K a year and someone working just one week a month is only one thousand dollars- due to all the state an governmnet benefits like child care, Medicaid, etc. It must be an official agenda- gut the middle class.

      • I don’t think your congressman really cares about any of us out here. I think they think the people are all dumb as sheep. After reading the book Dark Money the secret life of billionaires I got the distinct impression that that is why Bernie and Donald are doing so well in the poles… they are the only two candidates that are not controllable by the few that are, and are thinking for themselves instead of following the agenda set by a few that have the ears and the power to command our voted representatives and in my opinion that will not be tolerated by the silent power brokers… I am willing to bet money that Neither one of them will be allowed to hold the office either, no matter what the people think Just look at Colorado for instance…All because of the same reasons they are not willing to be controlled…

  6. “But the toughest enemy of all in life – and investing – is ourselves.” ;-)
    Brilliant!!