Addendum to my post on "I am clueless to the market direction", I read the following this morning which is interesting. It is a quote by the great trading master, Paul Tudor Jones:
"I see the younger generation [of hedge fund managers] hampered by the need to
understand and rationalize why something should go up or down. Usually, by the time that becomes self-evident, the move is already over. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. Why work when Mr. Market can do it for you? These days, there are many more deep intellectuals in the business, and that, coupled with the explosion of information on the Internet, creates the illusion that there is an explanation for everything.. There
are young men and women graduating from college who have a tremendous work ethic, but they get lost trying to understand the logic behind a whole variety of market moves. [At the end of a bull market or bear market] there's typically no logic to it; irrationality reigns supreme, and no class can teach you what to do during that brief, volatile, reign."
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This is a quote from Jim Rogers, as he talks about getting wiped out in 1970.
ReplyDelete"My early losses taught me a lot. Since then - I don't like to say this kind of thing - I have made very few mistakes. I learned quickly not to do anything unless you know what you are doing. I learned that it is better to do nothing and wait until you get a concept so right, and a price so right, that even if you are wrong, it is not going to hurt you." (Market Wizards by Jack Schwager)