Speculation As A Fine Art - Dickson Watts
Let me share some interesting excerpts from the book.
What is speculation? Speculation is a venture based upon calculation. Gambling is a venture without calculation.
What are the qualities essential to a speculator.
1.) Self Reliance. In other words, self-trust is the foundation of a successful speculation. A man cannot have another man's idea or body.
2.) Judgement. That equipoise, that nice adjustment of faculties one to the other, wich is called good judgement, is an essential to the speculator.
3.) Courage. That is, confidence to act on the decisions of the mind. Don't hesistate to act!!!!
4.) Prudence. The power of measuring the danger together with a certain alertness and watchfulness, is very important. It is all about risk management and being able to sleep well with your position.
5.) Piability. The ability to change an opinion. In other words, don't be stubborn!!! Things change and investment paradigm change as well. Everything is relative.
I find the qualities mentioned by Dickson Watts quite interesting. In my experience investing in the stock marekt, I can totally relate to what Mr. Watts is saying.
Most of my big losses are due to my lack of action. I "hoped" for the stock to go up when I could have gotten out alive and maintain my capital. There is no such thing as "hope" when it comes to investing. It is either you are "in" or "out" of the stock.
Most of my wrong analysis in rating a stock is due to my stubbornness to accept change. There is always such thing as a change in paradigm. What's cheap now may not look cheap at all. I always chastise analyst for saying that this stock is cheap at 5.0x PER!!!!! Valuations are relative and should not be taken at face value.
What is speculation? Speculation is a venture based upon calculation. Gambling is a venture without calculation.
What are the qualities essential to a speculator.
1.) Self Reliance. In other words, self-trust is the foundation of a successful speculation. A man cannot have another man's idea or body.
2.) Judgement. That equipoise, that nice adjustment of faculties one to the other, wich is called good judgement, is an essential to the speculator.
3.) Courage. That is, confidence to act on the decisions of the mind. Don't hesistate to act!!!!
4.) Prudence. The power of measuring the danger together with a certain alertness and watchfulness, is very important. It is all about risk management and being able to sleep well with your position.
5.) Piability. The ability to change an opinion. In other words, don't be stubborn!!! Things change and investment paradigm change as well. Everything is relative.
I find the qualities mentioned by Dickson Watts quite interesting. In my experience investing in the stock marekt, I can totally relate to what Mr. Watts is saying.
Most of my big losses are due to my lack of action. I "hoped" for the stock to go up when I could have gotten out alive and maintain my capital. There is no such thing as "hope" when it comes to investing. It is either you are "in" or "out" of the stock.
Most of my wrong analysis in rating a stock is due to my stubbornness to accept change. There is always such thing as a change in paradigm. What's cheap now may not look cheap at all. I always chastise analyst for saying that this stock is cheap at 5.0x PER!!!!! Valuations are relative and should not be taken at face value.
posted by jack galt at
9:51 PM
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