I’m currently reading this excellent book by Taleb. He is more famous for one of his other books (The Black Swan) but this book is very different in the way it describes luck and randomness in the markets and in life.
We all know someone who was in the right place at the right time and made a lot of money, but do we know anything about all the people who also thought they were in the right place at the right time but were proven wrong? Or do we know how many millionaires have been created by hard work and persistence but also how many people have failed even though they worked hard and were persistent?
I don’t agree with everything in the book, but it did bring up some interesting ideas about probabilities and how it’s impossible to pick every winner and avoid every loser. There is a great story halfway through the book about a successful trader who is happy to take small losses (and admit he is wrong), as it still allows him to effectively stay in the game for a big win - instead of having one big bet and ignoring any risk and then blowing up if that bet doesn’t work out.
Most people can’t stand to avoid losing money (even small losses) in the markets, but this is something that has to happen. It’s built into the game. It has to happen at some point as the probabilities on you betting on the wrong stock is always high.
However, I do believe that to maximise your chance of success in the markets you need to spend most of your day researching and trying to find value where others can’t be bothered to look. That’s the only way I know.
The Next Bull Market Move
Disclaimer - The above article is my opinion and should not be regarded as financial advice or as facts. Please seek a professional financial adviser for investment advice. The Next Bull Market Move does not represent investment advice and does not guarantee any success in the markets. All interviews and research are conducted in the name of analysis and opinion which can and may change at any time.