Youve been pretty specific about how you select your stocks How do you decide when to get out When and why did you get

My typical target is a double within twelve months. Unless I believe the stock has that potential, I probably will not be interested. In the case of Tektronix, the stock hit the double less than six months after we bought it, and we significantly reduced our position. Usually, when I get out of a stock, I still believe there is at least 20 or 30 percent left on the upside, but the key question is whether I can get a better risk-adjusted return somewhere else. So once a stock you buy...

Why do some athletes or traders excel whereas others with equal skill manage only moderate success

Sometimes when people reach their target and nothing happens, they stop paying attention to whatever the commitment was to get there. This explains why some people begin to lose after they succeed. They can't sustain the effort. When someone achieves his goal, the question is often, What now My answer, which is based on comparing athletes who have won gold medals with those who haven't, is to set up another target that will provide a challenge. The gold medal winners are always stretching for a...

What was the next step in your career progression

In 1985, Kingston was taken over in a merger. The acquiring firm changed everyone's job description. They told me 1 couldn't do the trading anymore because it all had to be done out of New York. They wanted me to move into an administrative role, which would have been a step back for me. Henry Skiff, the former manager of the Kingston branch office, went through an analogous experience. He was shifted to a structured job that he couldn't stand. He and another employee left Kingston after the...

Trading Like Any Other Business Endeavor Requires a Sound Business Plan

Cook advises that every trader should develop a business plan that answers all the following essential questions > What markets will be traded > What is the capitalization > How will orders be entered > What type of drawdown will cause trading cessation and reevaluation O- What are the profit goals > What procedure will be used for analyzing trades > How will trading procedures change if personal problems arise > How will the working environment be set up > What rewards will the...

The Confidence Chickenand Egg Question

One of the most strikingly evident traits among all the Market Wizards is their high level of confidence. This leads to the question Are they confident because they have done so well, or is t h e I r success a consequence of their confidence Of course, it would hardly be surprising that anyone who has done as extraordinarily well as the traders in this book would be confident. But the more interviews f do with Market Wizard types, the more convinced I become that confidence is an inherent trait...

Give me an example of a flawed business plan

My favorite theme for a short is a one-product company because if that product fails, they have nothing else to fall back on. It's also much easier to check out sales for a one-product company. A perfect example is Milestone Scientific. The company manufactured a product that was supposed to be a painless alternative to dental novocaine shots. It sounded like a great idea, and originally we started looking at the stock as a buy prospect. One of our analysts went to a dentistry trade show and...

What are your goals

My goal is to be the best money manager in the industry. After the fund reaches its ten-year anniversary, I hope to have the best track record for the prior ten years, nine years, all the way down to five years. Anything shorter than five years could indicate someone who is just lucky or using a style that is temporarily in favor with the market. Okumus has developed a trading style that assures he will miss 80 to 90 percent of the winning stocks he identifies and typically realize only a small...

What about Sambos

When I went to the Rose Bowl with my fraternity brothers, we went out to eat at a Sambo's. I had never heard of the chain before and thought it was neat, so I bought the stock. That's a summary of my total research. I didn't know anything more about either of the two companies. Then the stockbroker I was dealing with said, Mark, you like action. Why don't you try stock options I don't know anything about options, I told him. He gave me a booklet to read. After reading it from cover the cover, I...

Thats pretty impressive How much money did you make

I learned an interesting lesson about odds winning 80 percent of the time may not be enough if the odds are not right. I forget the exact number, but the track takes about 40 percent or more off the table. Wow, that's incredible that even makes slot machines look good So even though we won 80 percent of the time, it still wasn't enough to make any money. What information were you using to predict the race outcome All the information that comes in the racing program finish times for the dogs in...

Fundamentals Are Not Bullish or Bearish in a Vacuum They Are Bullish or Bearish Only Relative to Price

A great company could be a terrible investment if its price rise has already more than discounted the bullish fundamentals. Conversely, a company that has been experiencing problems and is the subject of negative news could be a great investment if its price decline has more than discounted the bearish information. In his interview, Lauer provided a number of excellent examples of this principle, among them Microsoft, an outstanding company in many respects, but one he considered a very poor...

Jack D Schwager

While the methods of investment described in this book are believed to be effective there is no guarantee that the methods will be profitable in specific applications, owing to the risk that is involved in investing of almost any kind. Moreover, readers are specifically advised that the author may invest in certain of the traders about which he is writing or has written and or may be affiliated with hedge fund s that so invest with such persons or entities. Neither the publisher nor the author...