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Joshua "MauiTrader" Hayes is CEO, President and founder of Big Wave Trading Inc., a Maui, Hawaii-based stock market advisory service. Hayes is a well-respected stock trader who combines fundamentals, technicals, psychology and money management to trade professionally for his personal,... More
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  • I Think Today’s Rally After The Past Two Days Make One Thing Clear 2 comments
    May 10, 2010 4:12 PM | about stocks: SPY, GLD, DIA, QQQ, VXX, EWY, TBT, SLV, GOOG, BIDU, AAPL, ISRG, GMCR, CMG, GS, C, EBAY, YHOO, MSFT, IBM, PG, MMM, SHLD, PCP, POT, PCLN


    Joshua Hayes: I will reiterate one more time, cash is KING for new investors in this market and for position traders. This market needs to calm down.

    Before you read the quotes from ROASO below, remember sitting tight involves sitting tight on your longs in a bull market, sitting tight on your shorts in a bear market, and SITTING TIGHT IN CASH WHEN THE TREND IS COMPLETELY INSANE like we are currently going through.

    wisdom/wise words from Jesse Livermore from the 1923 classic Reminiscences of a Stock Operator:

    (Chapter V) … “If a stock doesn’t act right don’t touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.”

    (Chapter V) … “I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements – that is, not in reading the tape but in sizing up the entire market and its trend.”

    (Chapter V) … “And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine – that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”

    (Chapter V) … “The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.”

    (Chapter V) … “Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks.”

    (Chapter V) … “One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.

    Disclosure: Disclosure: No Positions
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  • Art Trader
    , contributor
    Comments (120) | Send Message
    Hey Josh, if you like Livermore, get a 1930 edition of Reminiscences of a Stock Operator in a no reserve auction. Check it out:

    10 Nov 2010, 02:43 PM Reply Like
  • Joshua Hayes
    , contributor
    Comments (359) | Send Message
    Author’s reply » Thanks for the information, Art Trader. :)
    16 Nov 2010, 12:18 AM Reply Like
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