Monday, September 29, 2014

"We Ride the Tiger With Our Fingers Crossed."

“We ride the tiger with our fingers crossed.” – B. Biggs.


I think keeping a trader diary and a spreadsheet of trades made, when, and most important, why, is absolutely essential for a trader. (No, tweeting trades doesn't count).  I especially like to look back on why I sold a stock after it kept going up and what emotions were swirling around my reptile brain at the time.

In today's Trader Ten Minutes, I am reviewing some quotes by Barton Biggs:

"A personal investment diary is a step in the right direction."

"Such a diary has to be written in the heat of the moment, in the fire and agony of the time, not retroactively or retrospectively. Its value comes from reading your thoughts and emotions later in the context of events and seeing where you were right and wrong."  

"At the extreme moments of fear and greed, the power of the daily price momentum and the mood and passions of “the crowd” are tremendously important psychological influences on you. It takes a strong, self confident, emotionally mature person to stand firm against disdain, mockery, and repudiation when the market itself seems to be absolutely confirming that you are both mad and wrong. Also, be obsessive in making sure your facts are right and that you haven’t missed or misunderstood something. "
This page on Business Insider collects some more of Biggs's best quotes: http://www.businessinsider.com/11-insights-barton-biggs-2012-5?op=1

And of course, it's worth reading "Hedgehogging" by Biggs.  Why would a serious trader NOT read a successful money manager's thoughts when he makes them available for twenty bucks?

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