Buy the Book: Howard Marks explains the pattern of cycles found in markets, the economy, and business. An investor who understands the different cycles — the history, the driving factors, their interconnectedness, and the role of psychology — can avoid common errors and best position their portfolio for success.
Paul Tudor Jones: The Mental Obstacles of Investing
Investing is a process of self-discovery. Investors rarely find their strategy on the first try. It takes a few attempts.
The reason is simple. First, new investors aren’t handed a menu of investment strategies to pick from when they start. Second, no strategy comes complete with a full list of behavioral requirements that make it a good fit. It’s trial and error, for the most part.
And even when investors find a strategy that fits them, they’re bound to be tested at times that causes them to question their decision. Paul Tudor Jones highlighted two tests every trader will face at least once in their life: Continue Reading…
Reminiscences of a Stock Operator by Edwin Lefèvre
Buy the Book: Edwin Lefèvre’s fictionalized account of Jesse Livermore is a classic. It shares the timeless principles around trading in markets while warning of the biggest obstacle that plague speculators and investors alike — human nature.
The Notes
The Rise and Downfall of Richard Whitney
A syndicate of bankers gathered on October 24th to plan out how to end the panic. As acting president of the New York Stock Exchange, Richard Whitney was the face of the operation. The rest ran the six largest banks in the country.
It was like history repeating itself. J.P. Morgan famously did something similar in 1907 when he summoned the leading bankers to save the financial system from collapse. Only this time things didn’t work out as before.
The day after Black Thursday (October 24, 1929), Whitney strolled up to Post No. 2 on the exchange floor and ordered 10,000 shares of U.S. Steel. “205 for Steel” was the bid. It was over $5 above the current asking price. He did the same for several other blue-chip stocks. In a matter of minutes, he placed $20 million in bids. The market reversed course and rallied into the close. It was enough to turn the tide through the weekend.
The selling resumed on Monday. And on October 29th, forever known as Black Tuesday, the market was in a full-on panic. Continue Reading…
Once in Golconda by John Brooks
Buy the Book: John Brooks chronicles the 1920s bull market, its key players including Richard Whitney, the aftermath following the Great Crash of 1929, and how the events of that era transformed Wall Street.
The Notes
Just the Links
It’s been a busy week, so just the links. This is what I’ve found worth reading this weekend. Continue Reading…
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