Welcome!
Welcome to the course that will teach you everything you need to know to become successful in stock speculation. Starting it was the best investment in yourself you could have made – not in the market but in your own ability.
Many pundits, gurus and self-proclaimed online trading ‘experts’ give you the proverbial fish rather than the fishing pole – stocks that they picked, stocks that could have made you money … because usually they give you their stock picks in hindsight, after any chance to make money in the stock has passed. And even if they really do give you stock picks in real time, they often fail to pass along the tools necessary to handle a stock – when to buy, buy more, when to stay away, when to sell some, sell all, when to hold, and when to run. With this course, I have made it my goal to fill this niche and hand you the fishing pole itself: to teach you how to operate in the markets and profit by your own ability.
I’m a self-taught full-time stock speculator. I witnessed a couple of market cycles, and over the years I’ve shaped my own highly selective approach of speculation in stocks, inspired by my own experience, thousands of hours of deeply studying market cycles and leading stocks back over 140 years, and sieving through historic reports, trading logs, interviews, biographies and books by and about the greatest stock speculators of the last century and beyond. I sincerely hope that you can benefit from the fruits of my work and the many mistakes I’ve made with my own capital.
Everything taught in this course operates from and can be derived from a few basic principles which will reveal themselves to you gradually, and the purpose of the course is for you to understand how this business works from the ground up, using these principles.
Some numbers
Not everybody makes money in the stock market, or any financial market. In fact, there is a thumb rule that about 90% of retail traders (essentially another wording for ‘amateurs’) lose 90% of the money on their account in 90 days. The implication of that is massive. It means if you were a group of 10 friends who have a basic understanding of stocks, and you all started with $10,000 to put into stocks, on average, 9/10 guys would have ground their accounts down to $1,000 or lower within 3 months. That is a ridiculous number, especially for an endeavor that almost everyone in the western world has tried their hands at at some point in their lives.
You can also take the longer term perspective – over any 10-year period, out of those that try active stock selection and single stock buying, 85% under-perform the market … this number includes both amateurs and many publicly-certified or self-declared “professionals”. Yes, also those that think themselves pro most of the time cannot even match market performance.
Then there are the 10% who do not really make money, but also don’t really lose money, net – that means they roughly break even after that time.
Only about 5% are consistently successful.
That is another thumb rule, and I’d be so negative to bring that 5% down to 2-3%. It really doesn’t look good for the average market participant. That is because the odds are stacked against them.
First, by their own psychology – the average human is not trained to work in a stochastic environment (i.e. one based on odds and probabilities) that requires him to do just the opposite of what his natural impulses tell him.
Second, by most people’s unwillingness to treat the world of stocks as a business rather than as a hobby – and hobbies don’t pay, they cost you. That does not necessarily mean that you are required to put in long hours of work every day, but it demands a serious attitude of engagement.
And third, by the huge Wall Street brokerage and media machinery – which is geared towards and feeds off our psychological shortcomings and untrained emotional control for their own profit. Failure is built into the picture that is portrayed to you, coming from a clockwork that itself is abysmal at profiting in the market but expert at performing the magic trick of making money disappear from your pocket and appear in theirs.
What makes a pro successful?
Why do so many people lose money in the stock market? Because there is a huge chasm in perspective and skill between what’s called the ‘dumb’ and the ‘smart’ money, the amateurs versus the successful professionals. That is largely because the amateur most of the time does the exact opposite of what the successful pro would do.
The amateur makes impulsive decisions based on hope and fear, whereas the pro develops a detailed plan and sticks to it no matter what. The amateur does not manage risk, overrides his own rules, revenge-trades and rides stocks in downtrends, snowballing small losses into big drawdowns, while the pro takes minimal losses and moves onto the next opportunity. The amateur averages down, while the pro averages up. The amateur tries to trade all the time, while the pro can wait for weeks, months or even years without placing more than a small handful minimal probing trades. The amateur listens to tips, online articles, newsletters, journals and opinions including her own, while the pro isolates herself in a clinically sterile environment of steadfast facts derived by her own research. The list goes on, but you get the gist. A lot of this will become clearer as this course progresses.
To learn how to flourish in the stock market, you need to have an open mind. As Bruce Lee said so aptly, I can’t teach you if your glass is already full. You need to pour out what’s already in it. Odds are, what you’ve done so far was not that successful, so you might as well give something new a try – the fact that you are reading this course is testament to the desire that you would like to improve your skills, or learn the right approach from the outset.
Ask yourself – what is your existing approach really based on? Do you even have a clear set of unbreakable rules? Have you put in the work, the hundreds of hours of sweat and tears to develop a statistically and principally sound approach? Contrary to common belief, nobody is out to get you in the stock market (unless you become victim of a scam) – “they” don’t care about you. “They” and everybody else is in the market only for one reason, and that is to make profits for themselves. The market is not a zero-sum game, and people that take the opposite sides in the market can both win. But winning is predicated on the consistent application of a sound profitable strategy, and that is where the 95% people fail. You will have to put in some time, and you will have to unlearn a lot of things that you thought were true about how the stock market works… that means we’ll have to start fairly at the basics and drill our way deeper while regularly revisiting previous learning experiences.
Learning in layers
The first thing to emphasize about this course is that you will be exposed a lot of detailed information, and there will be a lot of content to cover. However, I designed this course so that you do not have to forcefully remember every single piece of information the first time it is mentioned. All ideas & concepts discussed are interwoven with each other, and will be introduced layer by layer.
This course is based on how large trends in the markets and stocks really emerge, and how we can capitalize on them. As the stock market works in cycles that rhyme and repeat over and over after years or decades, so does this course have a circular structure to be in sync with the market. We will start light, and over time get more and more into detail. That means, elements of stock speculation that we went over in an earlier guide will make more sense and fit in with others as you go through the course. For example, the first time I mention ideas underlying stock selection will be within the first few guides, however this first mention will not cover every small detail there is to know about stock selection that you will require down the road. I will rather introduce the more detailed and advanced information on a given topic gradually over the course while temporarily switching between topics. Because to understand how the more find-grained information will eventually fit in, you will often have to understand other concepts and ideas first.
Learning stock speculation is very much like doing a very large puzzle which pieces combine into a quite simple picture. After looking at the market for a while through the prism that this course provides you, you will realize that the underlying principles that I wrote about above are in fact quite simple to apply … but not easy. Adhering to our rules and these principles, and managing our own psychology and its pitfalls, is most often the problem. But we will get into this later.
At the beginning of any puzzle, all the pieces that lay in front of you will look unconnected, a mess. You pick one up to look at it, and won’t be able to see a connection to all the other pieces. You definitely can’t tell the final picture from it.
So, you put it down and look at another, and another, and so on… slowly you will find how one piece connects with another, and another one with yet another one.
Over time, you have more and more pieces that fit with each other, and sooner or later, you will start seeing a first semblance of the complete picture. The more you work on the puzzle, the more pieces you fit in, the more clearly the complete picture will become.
The puzzle analogy
It’s the same with stock speculation – you need to look at the details of puzzle piece after puzzle piece, and sooner or later you will see where the pieces connect, and you will start seeing the larger dynamic and principles that underlie the stock market and how to capitalize on it – the complete picture which lay hidden in the beginning.
By going through the different course guides, things will connect back to puzzle pieces you have learned earlier. When you start going through the different elements of stock speculation, you need to keep an open mind, and remember that not all puzzle pieces will immediately connect to the rest. You should expect that you will later have to go through some or other part of the course again and revise how earlier sections tie in with the things you learn later.
Before we get down to business, before you learn how and when to buy, hold and sell stocks, a brief note of caution: There’ll be a lot of guides to go through first that cover stock price/volume action and underlying dynamics of how stocks and the market behave. There is a reason for that: Making money in the markets is a business. Once you get better at it, you will see that it’s a simple business, but again, by no means easy. There are a lot of traps and pitfalls, otherwise more people would make a lot of money in stocks consistently. Thus, you will have to get through learning to a point where you can see the simplicity but at the same time the difficulty of it, and until then you should bar yourself from buying and selling stocks mindlessly.
So hold tight, have an open mind, and stay with me – it will be worth it in the end. Let’s get started!
As a side note – I will be talking about ‘speculators’ instead of the commonly used term ‘investors’. While ‘trader’ is a proper term that describes the technical act of buying & selling stocks or other financial instruments, I might use it from time to time synonymously to ‘speculator’, as it is a commonly used term. There is a difference of course, in that ‘speculation’ is a wider term encompassing the endeavour of successful market operations, but ‘trader’ shall do as well. However, the term ‘investor’ does not apply in the stock market as it does not meet the definition of an investment vehicle. Thus, I will refrain from mentioning it unless it is meaningful in a particular context (e.g. ‘institutional investors’, who also do other genuine investments aside from stocks).