Sunk Costs
Sunk Costs. That traders tend to cut their winners and let their losers run has been demonstrated by many studies. When they are on a winning trade, they become fearful that it will go bad, and they will lose the profits they have made. Conversely, when they are in a losing trade, they tend to […]
Bubbles, Long Tails & Freedom
Bubbles, Long Tails and Freedom. I have been reading the Psychology of Money by Morgan Housel, a best seller about wealth, greed and happiness. It didn’t start well; there were the usual stories, one about a man who pumped gas and swept floors all his life and died with $8 million in the bank. The […]
A Temporary Trader
Temporary Traders & The Wheel When I was young, I was told that if I couldn’t say anything nice about someone then don’t say anything at all. Good advice in social situations – but with investment advice? Not so much. A lot of readers are committed to the Wheel options strategy that we looked at […]
Reinventing the Wheel
The Options Wheel ‘The Wheel’ is probably the highest profile of all options strategies right now. It is a cyclical process where you: Sell put options on a stock / index that you would like to buy, typically 30 – 45 days to expiration. If it expires worthless you don’t buy the stock, but you […]
Stock Market or Casino?
Stock Market? Or Casino? People who don’t trade the stock market – and lots who do – tend to view the stock market as a giant casino where you bet on your favorites and hope they win. ETFs have provided a safer choice for people who wanted to participate in a rising stock market but […]
The Big Bust?
The Big Bust? A new year – and all the catastrophists come out of the woodwork. Headlines like this abound, but should we take them seriously? Always check who is saying it. (no don’t bother clicking on the arrow – its just a snapshot, and besides it isn’t worth listening to anyway!) In this case […]