Wall Street Craps – 2012 Global Ebook Finance Award-Winner

GET RICH IN THE DARK: Savvy players don’t share their opinions while playing the game. They quietly go about their business – playing correctly, making good money, and avoiding attention.

The temptation for amateur players is to share their opinions and early successes with almost anyone who will listen. But this type of naïve behavior has a way of locking an investor into their stated opinions. And as far as trading the stock market goes, a wise player must be able to turn on a dime and take decisive actions when underlying indicators point to a change in direction. In order to play the game correctly, investors must be willing to go against any previously stated positions without any regard for what other people may think about them.

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Comment: This advice comes from the gambling world. It is closely related to avoid the jinx. When things are going well for you, it’s the proper time to lie low and be humble. This is probably the exact opposite of what most amateurs are inclined to do….but precisely what the pros do. So when good fortunes come your way have the class and composure to handle it smoothly and quietly.

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“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

Charles Mackay ~ Author of Extraordinary Popular Delusions and The Madness of Crowds (1852)

IGNORE OTHER PLAYERS & THE DEALERS: Don’t get distracted by what other people say or do concerning the stock market. Combining different strategies will only cloud your thinking and prevent you from taking correct decisive actions. Remember that there will always be a well-qualified expert with convincing advice to take almost any position on the future course of the stock market.

The obvious truth is that no one really knows that outcome. As wise investors, we must not be fooled by the convictions or credentials of any expert and their opinions. What matters in the area of stock market advice is only the accuracy of the thinking and wisdom of the philosophy behind it.

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Comment: In terms of market analysis, you want to get to the point where you have enough experience working with the key internal indicators that you can trust your own decisions. Understand that when you are in an emotional state of uncertainty, you will be inclined to be swayed by what other people think and do. However, the one place where other people’s opinions matter is when you see a consistent pattern to cause you to look at them as “contrary indicators.”

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“It’s not the bulls and bears you need to avoid — it’s the bum steers.”

Chuck Hillis ` Portfolio Manager at Hillis Partnership