Amos Hostetter, the once wise sage of Commodities Corporation, offered wisdom we felt worth sharing.
Amos Hostetter: Trading Dont's
- Don't sacrifice your position for fluctuations.
- Don't expect the market to end in a blaze of glory. Look out for warnings.
- Don't expect the tape to be a lecturer. It's enough to see that something is wrong.
- Never try to sell at the top. It isn't wise. Sell after a reaction if there is no rally.
- Don't imagine that a market that has once sold at 150 must be cheap at 130.
- Don't buck the market trend.
- Don't look for the breaks. Look out for warnings.
- Don't try to make an average from a losing game.
- Never keep goods that show a loss, and sell those that show a profit. Get out with the least loss, and sit tight for greater profits.
Amos Hostetter: Dangers in Trading caused by Human Nature
- Fear: fearful of profit and one acts too soon.
- Hope: hope for a change in the forces against one.
- Lack of confidence in ones own judgment.
- Never cease to do your own thinking.
- A man must not swear eternal allegiance to either the bear or bull side.
- The individual fails to stick to facts!
- People believe what it pleases them to believe.
Think about how simple Hostetter's wisdom appears on the surface. But how many adhere to such principles?
