About nihao

Favorite Quotes:

"The successful warrior is the average man, with laser-like focus." Bruce Lee

"Every winner needs to master three essential components of trading: a sound individual psychology, a logical trading system, and a good money management plan. These essentials are like three legs of a stool - remove one and the stool will fall, together with the person who sits on it." Alexander Elder

"Should you find yourself in a chronically-leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."WB Chairman Letter 1985

“Leaving aside tax factors, the formula we use for evaluating stocks and businesses is identical. Indeed, the formula for valuing all assets that are purchased for financial gain has been unchanged since it was first laid out by a very smart man in about 600 B.C. (though he wasn’t smart enough to know it was 600 B.C.). The oracle was Aesop and his enduring, though somewhat incomplete, investment insight was “a bird in the hand is worth two in the bush.” To flesh out this principle, you must answer only three questions. How certain are you that there are indeed birds in the bush? When will they emerge and how many will there be? What is the risk-free interest rate (which we consider to be the yield on long-term U.S. bonds)? If you can answer these three questions, you will know the maximum value of the bush – and the maximum number of the birds you now possess. And, of course, don’t literally think birds. Think dollars.”
Chairman’s Letter to Shareholders, Warren Buffet 2000

"The Market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." Alexander Elder

"You need to be aware of your tendency to sabotage yourself. Stop blaming your losses on bad luck or on others and take responsibility for the results. Start keeping a diary - a record of all your trades, with reasons for entering and exiting them. Look for repetitive patterns of success and failure. Those that do not learn from the past are condemned to repeat it." Alexander Elder

"If we don’t understand something and it has a systemic effect, just avoid it. Models are error prone, something I knew well with finance; most risks only appear in analyses after harm is done. The burden is on those who pollute –or introduce new substances in larger than usual quantities –to show their lack of risk. In fact the more uncertainty about the models, the more conservative one should be." Nassim Taleb