Professional trader Tom Hougaard on the single biggest psychological mistake that ruins most traders:
He explains that the hardest part of trading isn't technical, it's psychological. It requires you to think in a way that directly contradicts how you operate in everyday life.
In real life, we are trained to hunt for bargains. We compare prices at the supermarket and naturally gravitate towards whatever is cheaper.
But Hougaard warns that applying this same instinct to markets is exactly what destroys most traders.
@TomHougaard puts it simply:
"You cannot be afraid of buying something that has already moved up significantly or you shouldn't be afraid of selling something that has already moved down significantly. And that's where the vast majority of people go wrong."
The problem, according to Hougaard, is that markets don't operate the way shoppers think:
"But the market doesn't operate with these principles of cheap or expensive. The market just has the prevailing price."
He explains why this is so difficult for people to internalise:
"Psychologically it's very difficult for us to accept because we are so brainwashed that we go to the supermarket and we see Pepsi Cola costs X but Coca-Cola is half price to Pepsi. So we all gravitate towards Coca-Cola because it's cheaper. But cheap in the market is a market that is going down. We don't want to buy that. We want to sell it short."
Hougaard sums up the core challenge of trading:
"The whole balance of being one person in real life and being another person in the market, that's what makes trading so incredibly difficult."
"Contrarianism is overrated.
Soros used to say the crowd's right 80% of the time. You just can't be caught in the other 20% because you can get your head handed to you." - Stanley Drunkenmiller #Investing#trading#Markets
Peter Lynch had 300% turnover per year in the early years of the Magellan Fund. Joel Greenblatt had similar turnover at Gotham Capital. Even Warren Buffett’s public company portfolio ranged between 50-100% turnover per year during his first three decades. In fact, contrary to what most believe, many of the greatest long-only investors had their best performance when they had higher rates of turnover in their portfolios. And these were investors that invested in larger, more established businesses where low turnover is much more achievable.
A big part of what made these investors great was spotting when they were wrong quicker. Successful stock picking isn’t just picking winners. It also means picking out the losers in your portfolio. The greatest advantage in public markets is “You can sell”. But you have to know when to sell.
https://t.co/JKl7NZSrIq
When Charlie Munger buried his 9-year-old son, he had nothing left.
He watched his child die from cancer, while worrying about how he would pay the hospital bills.
Divorced. Bankrupt. Grief that would have finished most men.
Munger was 31. He went back to work.
Started again as a lawyer. Made some money. But he was trading hours for dollars. So he became obsessed with investing: small real-estate deals, private investments. They told him he was a lawyer, not an investor. To stop taking on risk.
He'd already lost everything once before.
He knew: Comfort isnt a solution to pain.
Getting so good at something that your environment has no choice but to change around you.
He read. Not just finance, everything he could get his hands on: physics, biology, psychology, history. He built “mental models”: frameworks across disciplines.
That curiosity brought him to Warren Buffett. They met at a dinner in Omaha. Buffett was already a star investor. Munger didn’t try to be one.
But, he changed how Buffett thought.
Before Munger, Buffett bought cheap companies at a bargain.
Munger told him: buy great businesses at fair prices. Higher quality, longer compounding.
That single shift helped create Berkshire Hathaway into the machine it is today.
Munger became vice chairman, thinking partner behind decades of decisions.
He called out stupidity. He inverted problems. He chased incentives. He read for hours until his kids joked he was “a book with legs.”
He always worked. At 99 he was still learning. He never retired from learning, because he knew: curiosity compounds.
He never stopped. Never gave up. Never surrendered.
You can let grief flatten you. Or you can use it as fuel.
Munger lost marriage, money, and his son. He built a $900-billion empire not despite the pain, but because he let the pain teach him focus, rigor, and refusal to settle.
If you’re sitting on a wound, ask: is this my ending, or my starting point?
Are you letting failure be a loss, or a lesson?
Read everything. Build frameworks. Say what’s true even when it’s ugly. Become so valuable that your environment becomes a product of you.
The divorced lawyer who buried his child built an empire because he decided pain would make him larger, not smaller.
Nevr give up fren.
A setback is not your story. What you do next is.
First, never, ever invest in the present. It doesn't matter what a company's earning, what they have earned. You have to visualize the situation 18 months from now, and whatever that is, that's where the price will be, not where it is today. - Stanley Druckenmiller
"stock price is the best and least exploited information source available, is the clearest and most reliable indicator of the market’s expectations at any given time. You just need to know how to read the market today & anticipate what the expectations are likely to be tomorrow"
Larry Ellison’s net worth hits $393 Billion.. almost a $100 billion gain in a DAY..surpasses Elon Musk as the richest person.
This is the power of equity …in 1-2 days u can gain 2-3 years of return
All u need is 10-15 good days in ur long investment journey.
Think long term!