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Lessons from the Greatest Stock Traders of All Time!
By Mark Faimi
Lessons from the Greatest Stock Traders of All Time!
Bernard Baruch--The intelligent, sophisticated financier whose trading success earned him great riches and entry into successful financial dealings.
He believed that it doesn't really matter how high your IQ might be or what status you might have attained in some other profession, the market reacts indifferently to participants and doesn't really care who you might be as an individual.
His views on determining the reasons why so many people lose money in the market is that they think they can make money by not working for it. He believed that most people view the market as the place where the miracle of great and quick riches can be performed with little effort. However, he proved that the market is not a place to expect riches without the required sacrifice that the market demands.
Baruch believed that you simply must get the facts of a situation before you act and commit hard-earned money to a transaction.
Baruch did not believe that one needed to diversify too much, but that it was better to have a few stocks and to watch them carefully. He thought that one could simply not know all the relevant facts concerning too many stocks at one time. Focus was also a key skill he discovered that led to his success in the market.
He found through his years of trading that the two main mistakes that contributed to his early losses were the same mistakes he believed that most investors make, which were:
* They know too little about the company's management, earnings, prospects, and possibility for future growth.
* They tend to trade beyond their financial capital capacity.
Baruch was more of a fundamentalist type of trader than a technical trader. In evaluating the fundamentals and general qualities of a company, he would look at three main areas:
* The real assets of the company. Its cash and properties.
* That it must perform or produce something that is needed.
* That it must have good management.
His rules were to sell the stocks on the way up, and if the stock was declining, he would quickly sell and realize his loss.
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