Investment Facts

  • 1 Someone always wins.

    Someone is always taking the other side of your trade. What do they know that you don’t?

  • 2 Markets are not efficient.

    The markets are made to be taken advantage of, not to be persuaded by.

  • 3 Systematize your edge.

    In order for decision making to be consistently effective, it must be systematic.

  • 4 The markets are manipulated.

    Never forget that the government always wants the market to go up and that the further the market goes down the more manipulated the market becomes.

  • 5 Know your enemy.

    Wall Street is more concerned with putting money in their pocket than putting it in yours.

  • 6 Cash is king.

    Cash is a great place to invest when you don’t have a good reason to risk capital.

  • 7 Don’t follow the crowd.

    Placing bets that are unexpected by the crowd are normally your most profitable trades.

  • 8 This time is never different.

    If someone tries to convince you otherwise, back out of the room with your hand on your money.

  • 9 Make change your ally.

    Every investment system or model will eventually become obsolete.

  • 10 Focus on the present.

    Understanding the present is more important than predicting the future.

  • 11 Difficult decisions are more rewarding.

    The most difficult trades to make are generally the most profitable.

  • 12 Leverage can make bad decisions worse.

    Leverage reduces your ability to make non-subjective investment decisions.

  • 13 Understand your weaknesses.

    Controlling your emotions and avoiding previous mistakes are the essential ingredients for investment success.

  • 14 Sell high and buy low.

    The human condition makes it more difficult to sell what’s going up and buy what’s going down.

  • 15 Short positions decrease correlations.

    When volatility increases, everything becomes correlated except a short position.

  • 16 Expect the unexpected.

    Always leave yourself a margin of safety to protect against unexpected outcomes.

  • 17 Less is more.

    It is always better to win a bunch of small bets than one big one.

  • 18 Don’t expect a different result.

    History doesn’t always repeat itself but it rhymes very closely.

  • 19 Bonds don’t always go up.

    Stocks can trend for years while interest rates trend for decades.

  • 20 Learn from your mistakes.

    Failure can be a great learning experience but only if there is reflection on what went wrong.