by David J. Pollay
p10 - Many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they look for a place to dump it. And if you let them, they'll dump it on you. So when someone wants to dump on you, don't take it personally. Just smile, wave, wish them well, and move on. Believe me, you'll be happier
HW p11 -i would gain more time. I would not lose time out with friends or myself wasted on the garbage. I would have a more productive life. I would feel better and be more happier more often. I would not have the stress i carry and be able to be a better friend, boyfriend, co-worker, neighbor. I would be able to live more the life i want to live and the life i believe i deserve. Instead of 1 hr a day where i can concentrate on what matters with rest of the time wasted on garbage, i can use 6 hrs a day on the relevant stuff and no time at all on the garbage.
p53 + p54 - in simple terms, displaced aggression boils down to taking out your frustration on someone else; you let a negative event in your life upset you to the point of disproportionately and inappropriately lashing out at someone else at their slightest provocation......a mildly annoying event is perceived as highly aversive and deserving of an aggressive response.
HW, p55 - How have GT stolen your happiness and success? def JK and then KB and also debt worries...they made me feel like shit. as if the most important, and nearly the only important thing in my life is fucked so life is, as result, fucked as well. they took away all my energy from everything else. no matter what i was doing, no matter how fun, i would quickly get slapped right back into that tense, unhappy moments....
p60 - We are given a choice every day in the way we respond to each other. When people sincerely apologize, show remorse, and attempt to make amends, we have the opportunity to show grace and forgive them. We may still hold them accountable and accept compensation, but we can forgive them.
- Appreciate being forgiven. Before you are able to forgive another person, a good first exercise is to appreciate an instance of when you yourself have been forgotten.
- Life is not a series of discreet events - it's fluid. How you conclude one interaction affects how you respond to the next. How you treat one person carries over to the next person, and that person will more often than not carry that energy to the people he or she encounters. When you forgive people their transgressions, you set in motion a wave of good feelings. When you punish them with your words and behavior, you set in motion a wave of ill feelings.
- The experience of forgiveness when it occurs is not just the notion of being relieved of a burden, but also a joyful eureka sense of having solved a problem. Suddenly, the fight-or-flight response of vengeance is replaced by the calming vision of green pastures and still waters of peace
HW p62 - Think of the people you may have judged too harshly in recent months for acting like garbage trucks. how did you turn their mistakes into major offenses. consider what role u played in the incident. In retrospect, write below how you could have offered real-time forgiveness to those people and let their actions pass by.
- labeling KB has a garbage truck is good in that i don't allow her negativity to bother me as much but in some ways, i am considering everything she does as negative or coersive with a hidden agenda....and this of course is prob how she sees me and all my actions...she has been sporatically helpful and i should not forget that. at times she has mainly been the messenger but i interpreted it as her negativity towards me....so instead of agreeing with what her message was (which easily could have been from the two-faced VP), i was a bitch about it and labeled her a garbage truck and i needed to fight back....in hindsight, at these times, i was more the irrational garbage truck than her.....during these times, i should have been a good listener, forgive that she has to be the one to tell me the info, take in the info and compromise with it to see what should be done with it....she didn't shove any garbage my way so why envision it as such....
p63 - The mature person...makes sure that his own conduct is correct and seeks nothing from others; thus he is never disappointed. He has no complaints against heaven and no blame toward other people. - Tzu-ssu
p65 - First and foremost, your positivity is energizing to those around you. It's a large measure of what makes you attractive. Also, it's contagious. When you share your own joy, it ignites joy in others, a process that can forge lasting social ties. The more you open up and share your heartfelt positivity with others, the stronger your connections to others become.
HW p68 - KB - when asking for what we doing for next lesson, i either ask what we will do which can be taken as I expect her to do all the work....or I can tell her my ideas which can be interpretted as "this is what we are doing" and i don't care what u think......better way is just to ask "what lesson are we teaching....then later when i have some ideas, i can say....can i ask your opinion on what you think is best to teach?...or something like that...
p69 - I think we have to own the fears that we have of each other, and then, in some practical way, some daily way, figure out how to see people differently than the way we were brought up to. - Alice Walker
HW p 73 - I have labeled all whites and party-goers as garbage trucks...I don't care to get to know them and i avoid them at all costs....there are a few that i got to know and saw they are just as cool as other ppl....like gordon and kelly and other ppl like that that party all the time but on a normal occasion they are really cool...same with jenn and joan....then on the other side is whites like harry, skinny guy from orientation, and robert (UK guy), and bf and gf from scotland in my building and even tall simon from incheon...all super nice ppl that i liked a lot...but somehow i still keep this huge wall up and labeling all whites as permanent garbage trucks...i still avoid them at all costs, even the ones i mentioned...and even though tsubasa is half white, i am ok with him for some reason.....getting to know 2 more of them to knock down the wall is not enough.....hmm...speaking on the topic...there are a few teachers who just have a look about them and mainly cause they KB's friends that i just try to avoid..i got to talk to the nurse a lil and she was actually very nice.....somehow i am actually usually wrong yet i still don't care.....the wall has been around for too long...
HW p82 - GT is KB
can i perceive the good in her?
- not really, i need to be constantly reminded of the good she did behind the scenes or in the past as her attitude when i see her now is so bad...but if i try hard, i can see nice stuff she does everyday, like today, she brought up the dvds for me and without attitude told me what lesson we are doing...and she is the accountant of 4th grade teachers and she took the money nicely without fuss about how she does so much work because it is extra work without real appreciation from us...i should be thankful for all the nice things she decided our room needs...very nice of her...
....how could i be a GT to her? well...i fight back...i gave her trouble with VP and principle, especially when i said she was lying in front of all of her superiors in the cafeteria, and when she was the messenger for me not wearing a helmet when riding my bike...and i didn't listen to instructions "she gave me" such as when we had to clean the room...if students left the room in the same way i allow them to, KB and JK could have gotten really screwed over as it seemed like they are being slackers and don't know how to supervise the kids....and even when they cleaning and i told them not to clean my desk, it was me being a pain when all i had to do was give in and be compromising...but instead i again was her garbage truck by resisting direct orders she gave the kids..it made her look weak....and of course, i am also the burden to her as she can and is totally capable of teaching classes on her own, but because of the stupid gov't she has to babysit an untrained, ungrateful teacher who was born with great english, nothing to do with effort whatsoever....i will come in for 1 year, have fun in korea, do whatever to get out of real work at school, then leave without a care at all while she has to stay to clean up the mess, deal with all the politics related to school, and get paid shit....
so i am possibly the garbage truck to KB as she is the GT to me....weird how it can be so reciprocal...so what would the ideal person do in this situation? how do i fit the ideal? how do i fall short?
- ideal person would not give any attitute
- he would exercise compassion and expect nothing
- he would not compare KB to other teachers or other ppl...everyone is unique and who are we to judge...
- I would show appreciate for all the good and allow the bad to slide right past me.
- I would not avoid her but in fact try to work with her...i would not be the avoider...i would not make things worse
- i would try to be the most agreeable, least troubling co-worker she ever had....
and how do i fall short?
- mainly i am stubborn....i see things from my side and have no compassion towards her side...
- she has friends, maybe even more than me..definitely more than me at this school...must be some strong reasons why she is so likeable...
- and she is stressed...she needs a man..needs money....family prob on her back like crazy....and her english is not good either so she also feel insecure in that area as well....instead of thinking about how she can help me, i need to think about how i could help her...thats how i am with all the ppl i like and instead of letting it be me trying to like her first before being nice, i should try being nice to her before liking her....
- two ways in which i could change to improve the situation is:
1) stay in the classroom when she teaches
2) when she suggests something, instead of rejecting or giving in fully...mention what i like about it and then make it seem like a compromise so she feels like a winner
3)show compassion + expect nothing from her or anyone else for that matter.....only think about if i am doing the correct conduct.
4) be alert of how I can be helpful...(instead of just a immature burden)
HW p86 - i did the avoiding of KB and still do it today just like how the manager did to the author. and i am ashamed by it....me and KB prob dread talking to each other as badly as we each feel...and it needs to change....if i can observe her and find breaks in which she is super nice to other people or her students, then i can find times when i can compliment more to let her know that i am on her side, not against her...i tried this before and it worked a little, but definitely not superb...but that just might be because i didn't do it enough...i should to notice that not just do i put in lots of effort sometimes and her little but on other days, like today, she put in way more effort than me but it all comes unrecognized...
HW p92 - score: 54
- surprised how high it was..i thought i did better than this...but i guess everything i say is rude are all garbage trucks i need to pass...biggest was how mannerisms bother the hell out of me...if i can allow that to pass, i will be much better off.....brian and angela's mannerisms are stuff i should have just let pass by...i need to start labeling garbage trucks more often so i can be aware of it and let it pass...and mainly i think i am my own garbage truck and rules of mannersisms
HW p97
Thursday, March 1, 2012
Monday, February 27, 2012
How to Live on 24 hours a day
method to "expand" time
- morning commute (30min for 6 days a weeks), think on 1 thing and 1 thing only...focus and concentration...(can start with something as easy as just reading the newspaper in the morning)
- night time mental stimulation (90 min for 3 times a week), do something mentally stimulating like reading poetry, or a mental pursuit
- reflection - reflect on what u read or did or just life in general...its missing in most people's lives
therefore:
MWF night, stock scan + market analysis
Tu,Thurs - one day to mansoo...other day to chris...with mansoo, practice korean, with chris, learn korean
morning - think of 1 problem i want to solve
saturday, chill day...take care of self...day off
5 min every morning, meditate + reflect
5 min every night, meditate + reflect
notes:
It is the inexplicable raw material of everything. With it, all is possible; without it, nothing. The supply of time is truly a daily miracle, and affair genuinely astonishing when one examines it.
**decided to leave the notes in the kindle and not type it as its not worth the time
- morning commute (30min for 6 days a weeks), think on 1 thing and 1 thing only...focus and concentration...(can start with something as easy as just reading the newspaper in the morning)
- night time mental stimulation (90 min for 3 times a week), do something mentally stimulating like reading poetry, or a mental pursuit
- reflection - reflect on what u read or did or just life in general...its missing in most people's lives
therefore:
MWF night, stock scan + market analysis
Tu,Thurs - one day to mansoo...other day to chris...with mansoo, practice korean, with chris, learn korean
morning - think of 1 problem i want to solve
saturday, chill day...take care of self...day off
5 min every morning, meditate + reflect
5 min every night, meditate + reflect
notes:
It is the inexplicable raw material of everything. With it, all is possible; without it, nothing. The supply of time is truly a daily miracle, and affair genuinely astonishing when one examines it.
**decided to leave the notes in the kindle and not type it as its not worth the time
Wednesday, August 3, 2011
One Minute for Myself
by Spencer Johnson
- took so many notes that decided not to write the notes and just highlight a few points
- underwhelmed by the book actually as i expected lots more...but i did learn quite a bit
- Before I an take care of anything or anyone, I must first take good care of my self
- if i am taken care of, i will be happier and in a better mindset to help others
- if i have ignored myself, i will feel bad and no matter how hard i want to help others, my mind will feel too damaged and pessimistic to be helpful
- take 1 minute for myself when flustered. Stop, close your eyes, take deep slow breaths and ask yourself "how can i take better care of myself right now?"
- at any moment, you can change your mindset by turning your focus inwards
- "is there a better way right now for me to take good care of me?"
- When you take better care of my self, you naturally will take better care of others as you loving of yourself will become loving of others. And when they feel loved, the cycle will continue onto others.
- "the more I take good care of myself, the less resentment and anger I feel and the more loving I become towards myself and others
Monday, July 11, 2011
How I trade for a Living
by Gary Smith
- first book ever read on the kindle
- great book starting off...then irrelevant later as he drifts off about how he trades which is very diff from me
- most important is that it taught me to care about market sentiment indicators and to use this as the subjective
** stopped chart analysis of Gary's trades at "A 9 to 1 up-volume day" on page 122 of pdf
Rick Pitino's Success Is a Choice is an excellent book on setting goals. Pitino maintains that dreams are where we want to end up and goals are how we get there. Goals give us the routine we need to accomplish our dreams. He also says that our long-term success is the result of the small victories we accumulate along the way—that by looking for incremental progress, the small successes will lead to larger successes and achievement of our goals. I could be the poster boy for Pitino's book. It wasn't until I set my goal of no losing months that I became a winner. Over the years, the accumulation of winning months led to the larger success of realizing my dream of trading for a living.
I get a laugh whenever I recall the advice given in one of the bestselling trading books. The
psychological guru pontificated on the beliefs that all traders must possess to succeed in the game, which were derived from his analysis of the beliefs of successful traders. These required beliefs include the following:
• Money is not important.
• It's okay to lose in the markets.
• Win the game before you start with confidence.
My track record certainly qualifies me as a top trader. However, my pattern is more like this:
• I trade for the money.
• I die after every loss, which sometimes eats away at me for days and weeks afterward.
• I begin each trade with a complete lack of confidence, convinced it will be a loser.
I also find it's beneficial to dwell on my losses—another no-no in psychological trading guru-
land. This way, I am less prone to repeat my mistakes. As for trading with a complete lack of
confidence, I find it pays to prepare for the worst in every trade and assume it will not pan out. This way, I am never caught off guard psychologically when the market moves against me.
I am a firm believer that success leaves clues and that it's important to study these clues. There's a strong correlation between studying success and achieving success. Successful people are students of success.
Many left-brainers also believe there is some sort of order and rationality to the markets. They use mechanical trading tools and mathematical formulae to measure this rationality. I much prefer to accept the chaotic and irrational behavior of the markets and devise trading strategies based on that irrationality.
I've often thought that the truly great traders are those who have been able to merge their left-brain analytical functions with their right-brain creative functions. After all, it takes creativity and imagination to develop a mechanical trading system that is different from the pack's.
Too often, though, traders become prisoners of their favorite indicators and lose the ability to think for themselves. What counts in trading is what the market is saying, not the indicators.
The point is that the action of the market always takes precedence over your indicators. Indicators are only used to warn us of a possible change in trend. The emphasis here is on possible.
From my experience, the crux of winning at the trading game boils down to the trader's understanding of market sentiment, so it's not surprising that my favorite indicators are sentiment based.
One reason for this is that, of the group of traders who speculate in stocks, futures, mutual funds, or options, it's the option traders who tend to be the least capitalized. As Richard Band describes them in Contrary Investing, "By nature, people who play the options market tend to be gamblers, dreamers, who hope to parlay a couple thousand dollars into a fortune. As a group, they represent the dumb money at its dumbest."
My favorite statistical models for measuring put/call ratios are the following:
• When daily total CBOE put volume doubles its 10-day average
• Single-day OEX readings of 1.60 puts over calls
• Consecutive daily CBOE put/call ratios of 1.00 or greater
• Equity-only put/call ratios above .75
As for put/call ratios, besides the readings at the extremes, I'm most interested when periods of strongly rising prices are met with heavy put buying and, conversely, when periods of strongly declining prices are met with heavy call buying—in other words, when there are divergences.
Other than the rare instances when the equity-only put/call ratio reaches above .75, I pay little
attention to equity-only ratios. Nor do I pay much heed to total CBOE put/call ratios. I'm primarily interested in the index ratios, which include the OEX and the S&P 500.
The High/Low Logic Index is most predictive if used with a 10-week moving average. Readings
above 4.5 percent constitute a sell signal, and below I percent, a buy signal. On a weekly basis,
readings above 7 percent and under 1 percent are considered extreme and, respectively, are sell and buy signals. Weekly readings over 10 percent are rare, but particularly ominous.
• When the Dow declines while the advance/decline line is rising, the market will rise.
• When the Dow advances—especially to new highs—while the advance/decline line is falling, the
market will decline.
• When the Dow approaches a previous low and the advance/ decline line is well above where it was at the time of that previous low, it's time to become bullish.
• When the Dow approaches a previous high and the advance/ decline line is well below its previous reading, which corresponded with that top, it's time to be cautious.
• The direction of breakouts from trading ranges in the Dow and S&P can often be determined if the advance/decline line has already broken out of its trading range.
With but a few exceptions, a pronounced uptrend or downtrend in the Utilities eventually will be followed by the broader market.
Through the years, I've come to see there is a flow and rhythm to the market, and that rhythm is its momentum. Being a successful trader hinges on being in synch with this momentum.
V-bottom reversals occur intraday where the Dow has been in decidedly negative territory the entire trading session, down at least .75 percent, and then makes a furious comeback, closing either near the unchanged level or, preferably, up for the day. The later in the day the reversal occurs, the more significance I attach to it. I will instinctively trade V-bottom reversals if the previous day closed down or if the Dow has been in a recent downtrend. On the other hand, I don't attach much importance to V-bottom reversals occurring after a strong up day or during a period of rising prices. In most of these occurrences, I will already be in the market before the day of the V-bottom reversal.
Closely related to V-bottom reversals are the late-day upside surge patterns. These normally occur during the last 2 to 2 1/2 hours in a trading day that has seen trendless and choppy price action. These late-day price surges should take the Dow to a close of at least .50 percent above the prior day's close. As with the V-bottom reversals, this pattern is significant only when it comes after a down day or a period of declining prices.
One of my more reliable momentum patterns over the years has been the Friday-to-Monday pattern. Stronger-than-average strength on a Friday is expected to be followed by more strength on Monday (or Tuesday if Monday is a trading holiday). Conversely, extremely weak price action on a Friday is expected to lead to more weakness on Monday. A Friday-to-Monday momentum break pattern occurs when the expected strength or weakness on Friday doesn't carry over to Monday. These weekend momentum break patterns are highly significant and indicative of a short-term trend change.
A 1 percent true selling day occurs after a period of rising prices of at least two weeks in which the Dow, S&P, Nasdaq 100, and Russell 2000 indexes all close down 1 percent or more on the same trading day. These types of days often are trend busters and can be harbingers of serious price declines ahead. I use a little leeway, however, in defining such selling days. For instance, if three of the four indexes are sharply lower—say, down 1.5 percent to 2 percent or more—but one is down only .75 percent to 1 percent, then I interpret that as a true selling day.
However, my limit is .75 percent. This means that if any index is down less than .75 percent on a day when the rest of the indexes are sharply lower, there is buying interest in at least one segment of the market, which rules out a true selling day.
One trading rule I live by is to expect weakness on Monday if the preceding Friday is extremely weak. Conversely, extreme strength on Fridays should also lead to more strength on the following Monday. Any aberration in these patterns gets my immediate attention.
Prematurely taking profits is an exercise best left for fools and losers. To accumulate wealth, you need to maximize your winning trades as much as possible by riding them for as much as you can and for as long as you can.
If you recall, that was one of my deficiencies during the 19 years I struggled as a break-even trader. I always seemed to be on board markets that were about to blast off. But for whatever reasons, I always found a way to exit before the actual fireworks began. Then when the market did take off, I just sat there, unable to reestablish my position. Let me tell you, if you ever hope to succeed in the trading game, you better learn how to overcome this type of psychological trading defect.
Of all the patterns I trade, the least reliable is the 1 percent true selling day pattern. And it certainly gave a false signal on March 5. However, when it's wrong, I usually know within a day or two and get back in the market. As you will shortly see, when it's right, it more than makes up for its occasional false signals.
One comment about late-day reversals bears reiteration. They normally occur in the Dow and the S&P. Then on the follow-through day or days, technology usually leads the way. With that in mind, I usually look to buy into the technology sector on late-day reversals.
August 21, the Dow made a huge turnaround and closed down only 77 points. However, this did not come close to qualifying as a V-bottom or late-day reversal pattern. To have qualified, the Dow would have had to close up or just slightly in negative territory. I've seen too many of these quasi-reversal days when the Dow makes the big intraday comebacks but still closes firmly down.
Every Bull Market in history, and many good intermediate advances, have been launched with a buying stampede that included one or more 9-to-1 up days." More significant than a solitary 9-to-1 up-volume day are two such 9-to-1 days that occur within three months of each other.
As a trader, I enter markets based on expectations of momentum follow-through. When my expectations aren't met, I immediately exit—no waiting, hoping, or praying.
Always remember that the most bullish thing a market can do is rise on extreme momentum. Yet many people are fearful that this type of extreme strength is an invitation for a market correction. Historically, extreme strength only leads to additional strength. This is even more so if the momentum surge occurs after a period of declining prices such as the situation prior to October 8, 1998.
The most bullish thing the market can do is not collapse when everyone is expecting it to.
I know that regardless of how bearish I may be, the market is always right and tells it own story best. Always remember that traders react to the evolving market, they don't predict and they don't anticipate. What separates the good traders from the not-so-good is the quickness of their reaction time.
Regardless of the study, it simply doesn't pay to be shaken out by extremely weak days in the market. Extremely weak trading days invariably lead to strength, not weakness.
I exit my positions on the weakness that precedes the real debacle days. In other words, debacle days rarely come from out of the blue. There is usually a period of a few days or weeks that leads up to the climactic selling days. It's at that initial weakness where I exit my positions and go to cash.
As you have seen, I trade various momentum patterns. In trading these patterns, there are no ifs, ands, or buts. Either the market immediately responds in my favor or I exit my position. How much simpler can a money management strategy get? If I buy because of extreme strength on a Friday that doesn't follow through on Monday, I'm gone. If I buy because of a late-day V-bottom upside reversal or price surge and there is no carryover buying the following day, I'm gone. If I buy the Nasdaq 100 because of a day or two of extreme positive divergence and the divergence dissipates the next day, I'm gone. I always enter or exit a market based on particular expectations. When the market proves me wrong by not immediately confirming those expectations, I act accordingly.
My most basic money management precept is that wealth accumulation comes from maximizing your winning trades—meaning that the name of the game is to make the big money when you are right. I'm a very conservative trader who becomes very aggressive when I get on board a winner. My method of exploiting winning trades is to continually add to my position on a scale-up, as taught by Darvas and Livermore. I try to milk winning trades for as long as I can and for as much as I can. Some would call this a pyramiding strategy. Try this type of strategy with futures, options, or any leveraged trading vehicle and you can get your head handed to you on just the slightest price reaction.
READING LIST
Books 1 through 7 in the following list are my favorite books of all time and appear in their order of importance to me. I have not included the previously recommended books on mutual funds.
1. How I Made $2,000,000 in the Stock Market, by Nicholas Darvas (New York: Lyle Stuart,
1986). No surprise here, as I've mentioned this book throughout How I Trade for a Living. This is my favorite trading book for primarily sentimental reasons. I wouldn't expect others to feel as much of an impact as I did when I read an earlier edition in 1961. Traders are always asking me specific mechanical questions about the Darvas methodology. I tell them that the Darvas book, as with any of the books I recommend, should be read for its concepts and not for black-and-white trading rules.
2. Reminiscences of a Stock Operator, by Edwin Lefevre (New York: John Wiley & Sons, 1994).
This is my kind of book—all text and not a chart in sight. This is the kind of book that should be read annually. Livermore's insights on trading are just as valuable today as they were nearly 100 years ago. This goes to show you that successful trading is simply a matter of following the principles of cutting losses and adding to your winners as you let your profits run.
3. Dow 1000, by Benton Davis (Larchmont, NY: American Research Council, 1964). This is another one of those books that I like more for sentimental reasons than for actual content. Davis, like Nicholas Darvas and Jesse Livermore, stresses letting the market tell you what to do and not your opinions. Dow 1000 contains my favorite piece of trading advice: "THE STOCK MARKET IS ALWAYS RIGHT AND ALWAYS TELLS ITS OWN STORY BEST." The capital letters are just as they appeared in Davis's book.
4. The Education of a Speculator, by Victor Niederhoffer (New York: John Wiley & Sons, 1997).
While the books by Darvas, Lefevre, and Davis may be my three favorite books of all time,
Niederhoffer's book is the best I've read about trading. Admittedly, Niederhoffer's book reads like a doctoral thesis, but it is well worth the effort. This is the only trading book I reread immediately after my initial reading—it was that good.
5. Why the Best-Laid Investment Plans Usually Go Wrong, by Harry Browne (New York: William Morrow and Company, 1987). Part One, which encompasses the first 235 pages of the book, is a must-read. Ignore Part Two completely, since it's about an outdated investment strategy. I underlined more passages in Harry Browne's book than in any other. His first paragraph tells it all: "The best-kept secret in the investment world is this: Almost nothing turns out as expected. Forecasts rarely come true, trading systems never produce the results advertised for them, investment advisors with records of phenomenal success fail to deliver when your money is on the line, the best investment analysis is contradicted by reality."
6. Mind over Markets, by James F. Dalton, Eric T. Jones, and Robert B. Dalton (Chicago: Probus,
1993). This book is about a trading methodology called Market Profile. Although this methodology is much like mine, I've never completely grasped Market Profile. I recommend Mind over Markets not for the method it preaches, but for its presentation of what it takes to become a successful trader.
7. The Tao Jones Averages, by Bennett Goodspeed (New York: E.P. Dutton, 1983). If you are a
struggling analytical-type trader, then it is probably because you tend to resist change by making fixity out of flux. Or as Goodspeed likes to say, "trying to understand running water by catching it in a bucket."
8. Rogues to Riches, by Murray Teigh Bloom (New York: G. P. Putnam's Sons, 1971). This author went in search of investors and traders who had conquered the market because of some special insight or trading method.
9. If They're So Smart, How Come You're Not Rich?, by John L. Springer (Chicago: Henry Regney Company, 1971). Read this book and you will understand how at such a young age I came to mistrust anyone labeled as a market expert.
10. Why Most Investors Are Mostly Wrong Most of the Time, by William X. Scheinman (New
York: Weybright and Talley, 1970). Yet another book that takes an unconventional approach to
trading. Scheinman presents a methodology for measuring investor sentiment.
11. Wiped Out, by Anonymous Investor (New York: Simon & Schuster, 1966). How a typical
investor lost all his money because he thought there were experts who knew better.
12. A Fool and His Money, by John Rothchild (New York: Penguin Books, 1988). The odyssey of
an average investor as he searches far and wide for that one expert or guru who has all the answers.
The next five books are recommended for their research, indicators, and investing techniques.
13. Stocks for the Long Run, by Jeremy J. Siegel (New York: McGraw-Hill, 1998). I often use
Siegel's book as a reference when debating the perennial prophets of pessimism in the various
newsgroups.
14. Stock Market Logic, by Norman Fosback (Chicago: Dearborn Financial Publishing, 1995). If
ever updated, this investment classic would become an investment bible.
15. Winning on Wall Street, by Martin Zweig (New York: Warner Books, 1997). Zweig has
ingrained traders with the credo that you never fight the tape and never fight the Fed. After reading his book, you will understand why.
16. Stock Trader's Almanac, by Yale Hirsch (Old Tappan, NJ: The Hirsch Organization). This
reference book is updated annually and is the best source on historical seasonal trading patterns.
17. 101 Years on Wall Street, by John Dennis Brown (Englewood Cliffs, NJ: Prentice Hall, 1991).
This is my favorite reference book on the market. It covers 101 years (1890 to 1990) of market
history. It's complete with charts and statistical information, and compares all the bull and bear
markets.
18. Market Wizards (New York: Harper & Row, 1990) and The New Market Wizards (New
York: Harper Business, 1992), by Jack Schwager. There have been many books about trading
masters and mavens and what makes them tick, but Jack's interviews with the market wizards are by far the best. Beware, though: Some of these market wizards have lost their touch and have become promotional wizards, peddling systems, seminars, and fax services.
19. The Trader's Edge, by Grant Noble (Chicago: Probus, 1995). How can I not like a book in
which the author gives me three paragraphs of exposure? Yet another book that takes an
unconventional view of the trading game.
20. Winner Take All, by William R. Gallacher (Chicago: Probus, 1994). Ditto #19 about being an
unconventional trading book.
21. Trading for a Living, by Alexander Elder (New York: John Wiley & Sons, 1993). As a rule, I
dislike trading books that present a hodgepodge of trading methods. I much prefer books about one trading method and how the author made it work for him or her. But Elder's book is the exception to my rule. The first 68 pages, about the psychology of trading, are what set this book apart. This book is especially recommended for futures traders.
22. Pit Bull, by Martin Schwartz (New York: HarperBusiness, 1998). I have a thing about trading
books by real traders—and Marty Schwartz is definitely a real trader. You'll see that he is also a big believer in synthesizing indicators.
- first book ever read on the kindle
- great book starting off...then irrelevant later as he drifts off about how he trades which is very diff from me
- most important is that it taught me to care about market sentiment indicators and to use this as the subjective
** stopped chart analysis of Gary's trades at "A 9 to 1 up-volume day" on page 122 of pdf
Rick Pitino's Success Is a Choice is an excellent book on setting goals. Pitino maintains that dreams are where we want to end up and goals are how we get there. Goals give us the routine we need to accomplish our dreams. He also says that our long-term success is the result of the small victories we accumulate along the way—that by looking for incremental progress, the small successes will lead to larger successes and achievement of our goals. I could be the poster boy for Pitino's book. It wasn't until I set my goal of no losing months that I became a winner. Over the years, the accumulation of winning months led to the larger success of realizing my dream of trading for a living.
I get a laugh whenever I recall the advice given in one of the bestselling trading books. The
psychological guru pontificated on the beliefs that all traders must possess to succeed in the game, which were derived from his analysis of the beliefs of successful traders. These required beliefs include the following:
• Money is not important.
• It's okay to lose in the markets.
• Win the game before you start with confidence.
My track record certainly qualifies me as a top trader. However, my pattern is more like this:
• I trade for the money.
• I die after every loss, which sometimes eats away at me for days and weeks afterward.
• I begin each trade with a complete lack of confidence, convinced it will be a loser.
I also find it's beneficial to dwell on my losses—another no-no in psychological trading guru-
land. This way, I am less prone to repeat my mistakes. As for trading with a complete lack of
confidence, I find it pays to prepare for the worst in every trade and assume it will not pan out. This way, I am never caught off guard psychologically when the market moves against me.
I am a firm believer that success leaves clues and that it's important to study these clues. There's a strong correlation between studying success and achieving success. Successful people are students of success.
Many left-brainers also believe there is some sort of order and rationality to the markets. They use mechanical trading tools and mathematical formulae to measure this rationality. I much prefer to accept the chaotic and irrational behavior of the markets and devise trading strategies based on that irrationality.
I've often thought that the truly great traders are those who have been able to merge their left-brain analytical functions with their right-brain creative functions. After all, it takes creativity and imagination to develop a mechanical trading system that is different from the pack's.
Too often, though, traders become prisoners of their favorite indicators and lose the ability to think for themselves. What counts in trading is what the market is saying, not the indicators.
The point is that the action of the market always takes precedence over your indicators. Indicators are only used to warn us of a possible change in trend. The emphasis here is on possible.
From my experience, the crux of winning at the trading game boils down to the trader's understanding of market sentiment, so it's not surprising that my favorite indicators are sentiment based.
One reason for this is that, of the group of traders who speculate in stocks, futures, mutual funds, or options, it's the option traders who tend to be the least capitalized. As Richard Band describes them in Contrary Investing, "By nature, people who play the options market tend to be gamblers, dreamers, who hope to parlay a couple thousand dollars into a fortune. As a group, they represent the dumb money at its dumbest."
My favorite statistical models for measuring put/call ratios are the following:
• When daily total CBOE put volume doubles its 10-day average
• Single-day OEX readings of 1.60 puts over calls
• Consecutive daily CBOE put/call ratios of 1.00 or greater
• Equity-only put/call ratios above .75
As for put/call ratios, besides the readings at the extremes, I'm most interested when periods of strongly rising prices are met with heavy put buying and, conversely, when periods of strongly declining prices are met with heavy call buying—in other words, when there are divergences.
Other than the rare instances when the equity-only put/call ratio reaches above .75, I pay little
attention to equity-only ratios. Nor do I pay much heed to total CBOE put/call ratios. I'm primarily interested in the index ratios, which include the OEX and the S&P 500.
The High/Low Logic Index is most predictive if used with a 10-week moving average. Readings
above 4.5 percent constitute a sell signal, and below I percent, a buy signal. On a weekly basis,
readings above 7 percent and under 1 percent are considered extreme and, respectively, are sell and buy signals. Weekly readings over 10 percent are rare, but particularly ominous.
• When the Dow declines while the advance/decline line is rising, the market will rise.
• When the Dow advances—especially to new highs—while the advance/decline line is falling, the
market will decline.
• When the Dow approaches a previous low and the advance/ decline line is well above where it was at the time of that previous low, it's time to become bullish.
• When the Dow approaches a previous high and the advance/ decline line is well below its previous reading, which corresponded with that top, it's time to be cautious.
• The direction of breakouts from trading ranges in the Dow and S&P can often be determined if the advance/decline line has already broken out of its trading range.
With but a few exceptions, a pronounced uptrend or downtrend in the Utilities eventually will be followed by the broader market.
Through the years, I've come to see there is a flow and rhythm to the market, and that rhythm is its momentum. Being a successful trader hinges on being in synch with this momentum.
V-bottom reversals occur intraday where the Dow has been in decidedly negative territory the entire trading session, down at least .75 percent, and then makes a furious comeback, closing either near the unchanged level or, preferably, up for the day. The later in the day the reversal occurs, the more significance I attach to it. I will instinctively trade V-bottom reversals if the previous day closed down or if the Dow has been in a recent downtrend. On the other hand, I don't attach much importance to V-bottom reversals occurring after a strong up day or during a period of rising prices. In most of these occurrences, I will already be in the market before the day of the V-bottom reversal.
Closely related to V-bottom reversals are the late-day upside surge patterns. These normally occur during the last 2 to 2 1/2 hours in a trading day that has seen trendless and choppy price action. These late-day price surges should take the Dow to a close of at least .50 percent above the prior day's close. As with the V-bottom reversals, this pattern is significant only when it comes after a down day or a period of declining prices.
One of my more reliable momentum patterns over the years has been the Friday-to-Monday pattern. Stronger-than-average strength on a Friday is expected to be followed by more strength on Monday (or Tuesday if Monday is a trading holiday). Conversely, extremely weak price action on a Friday is expected to lead to more weakness on Monday. A Friday-to-Monday momentum break pattern occurs when the expected strength or weakness on Friday doesn't carry over to Monday. These weekend momentum break patterns are highly significant and indicative of a short-term trend change.
A 1 percent true selling day occurs after a period of rising prices of at least two weeks in which the Dow, S&P, Nasdaq 100, and Russell 2000 indexes all close down 1 percent or more on the same trading day. These types of days often are trend busters and can be harbingers of serious price declines ahead. I use a little leeway, however, in defining such selling days. For instance, if three of the four indexes are sharply lower—say, down 1.5 percent to 2 percent or more—but one is down only .75 percent to 1 percent, then I interpret that as a true selling day.
However, my limit is .75 percent. This means that if any index is down less than .75 percent on a day when the rest of the indexes are sharply lower, there is buying interest in at least one segment of the market, which rules out a true selling day.
One trading rule I live by is to expect weakness on Monday if the preceding Friday is extremely weak. Conversely, extreme strength on Fridays should also lead to more strength on the following Monday. Any aberration in these patterns gets my immediate attention.
Prematurely taking profits is an exercise best left for fools and losers. To accumulate wealth, you need to maximize your winning trades as much as possible by riding them for as much as you can and for as long as you can.
If you recall, that was one of my deficiencies during the 19 years I struggled as a break-even trader. I always seemed to be on board markets that were about to blast off. But for whatever reasons, I always found a way to exit before the actual fireworks began. Then when the market did take off, I just sat there, unable to reestablish my position. Let me tell you, if you ever hope to succeed in the trading game, you better learn how to overcome this type of psychological trading defect.
Of all the patterns I trade, the least reliable is the 1 percent true selling day pattern. And it certainly gave a false signal on March 5. However, when it's wrong, I usually know within a day or two and get back in the market. As you will shortly see, when it's right, it more than makes up for its occasional false signals.
One comment about late-day reversals bears reiteration. They normally occur in the Dow and the S&P. Then on the follow-through day or days, technology usually leads the way. With that in mind, I usually look to buy into the technology sector on late-day reversals.
August 21, the Dow made a huge turnaround and closed down only 77 points. However, this did not come close to qualifying as a V-bottom or late-day reversal pattern. To have qualified, the Dow would have had to close up or just slightly in negative territory. I've seen too many of these quasi-reversal days when the Dow makes the big intraday comebacks but still closes firmly down.
Every Bull Market in history, and many good intermediate advances, have been launched with a buying stampede that included one or more 9-to-1 up days." More significant than a solitary 9-to-1 up-volume day are two such 9-to-1 days that occur within three months of each other.
As a trader, I enter markets based on expectations of momentum follow-through. When my expectations aren't met, I immediately exit—no waiting, hoping, or praying.
Always remember that the most bullish thing a market can do is rise on extreme momentum. Yet many people are fearful that this type of extreme strength is an invitation for a market correction. Historically, extreme strength only leads to additional strength. This is even more so if the momentum surge occurs after a period of declining prices such as the situation prior to October 8, 1998.
The most bullish thing the market can do is not collapse when everyone is expecting it to.
I know that regardless of how bearish I may be, the market is always right and tells it own story best. Always remember that traders react to the evolving market, they don't predict and they don't anticipate. What separates the good traders from the not-so-good is the quickness of their reaction time.
Regardless of the study, it simply doesn't pay to be shaken out by extremely weak days in the market. Extremely weak trading days invariably lead to strength, not weakness.
I exit my positions on the weakness that precedes the real debacle days. In other words, debacle days rarely come from out of the blue. There is usually a period of a few days or weeks that leads up to the climactic selling days. It's at that initial weakness where I exit my positions and go to cash.
As you have seen, I trade various momentum patterns. In trading these patterns, there are no ifs, ands, or buts. Either the market immediately responds in my favor or I exit my position. How much simpler can a money management strategy get? If I buy because of extreme strength on a Friday that doesn't follow through on Monday, I'm gone. If I buy because of a late-day V-bottom upside reversal or price surge and there is no carryover buying the following day, I'm gone. If I buy the Nasdaq 100 because of a day or two of extreme positive divergence and the divergence dissipates the next day, I'm gone. I always enter or exit a market based on particular expectations. When the market proves me wrong by not immediately confirming those expectations, I act accordingly.
My most basic money management precept is that wealth accumulation comes from maximizing your winning trades—meaning that the name of the game is to make the big money when you are right. I'm a very conservative trader who becomes very aggressive when I get on board a winner. My method of exploiting winning trades is to continually add to my position on a scale-up, as taught by Darvas and Livermore. I try to milk winning trades for as long as I can and for as much as I can. Some would call this a pyramiding strategy. Try this type of strategy with futures, options, or any leveraged trading vehicle and you can get your head handed to you on just the slightest price reaction.
READING LIST
Books 1 through 7 in the following list are my favorite books of all time and appear in their order of importance to me. I have not included the previously recommended books on mutual funds.
1. How I Made $2,000,000 in the Stock Market, by Nicholas Darvas (New York: Lyle Stuart,
1986). No surprise here, as I've mentioned this book throughout How I Trade for a Living. This is my favorite trading book for primarily sentimental reasons. I wouldn't expect others to feel as much of an impact as I did when I read an earlier edition in 1961. Traders are always asking me specific mechanical questions about the Darvas methodology. I tell them that the Darvas book, as with any of the books I recommend, should be read for its concepts and not for black-and-white trading rules.
2. Reminiscences of a Stock Operator, by Edwin Lefevre (New York: John Wiley & Sons, 1994).
This is my kind of book—all text and not a chart in sight. This is the kind of book that should be read annually. Livermore's insights on trading are just as valuable today as they were nearly 100 years ago. This goes to show you that successful trading is simply a matter of following the principles of cutting losses and adding to your winners as you let your profits run.
3. Dow 1000, by Benton Davis (Larchmont, NY: American Research Council, 1964). This is another one of those books that I like more for sentimental reasons than for actual content. Davis, like Nicholas Darvas and Jesse Livermore, stresses letting the market tell you what to do and not your opinions. Dow 1000 contains my favorite piece of trading advice: "THE STOCK MARKET IS ALWAYS RIGHT AND ALWAYS TELLS ITS OWN STORY BEST." The capital letters are just as they appeared in Davis's book.
4. The Education of a Speculator, by Victor Niederhoffer (New York: John Wiley & Sons, 1997).
While the books by Darvas, Lefevre, and Davis may be my three favorite books of all time,
Niederhoffer's book is the best I've read about trading. Admittedly, Niederhoffer's book reads like a doctoral thesis, but it is well worth the effort. This is the only trading book I reread immediately after my initial reading—it was that good.
5. Why the Best-Laid Investment Plans Usually Go Wrong, by Harry Browne (New York: William Morrow and Company, 1987). Part One, which encompasses the first 235 pages of the book, is a must-read. Ignore Part Two completely, since it's about an outdated investment strategy. I underlined more passages in Harry Browne's book than in any other. His first paragraph tells it all: "The best-kept secret in the investment world is this: Almost nothing turns out as expected. Forecasts rarely come true, trading systems never produce the results advertised for them, investment advisors with records of phenomenal success fail to deliver when your money is on the line, the best investment analysis is contradicted by reality."
6. Mind over Markets, by James F. Dalton, Eric T. Jones, and Robert B. Dalton (Chicago: Probus,
1993). This book is about a trading methodology called Market Profile. Although this methodology is much like mine, I've never completely grasped Market Profile. I recommend Mind over Markets not for the method it preaches, but for its presentation of what it takes to become a successful trader.
7. The Tao Jones Averages, by Bennett Goodspeed (New York: E.P. Dutton, 1983). If you are a
struggling analytical-type trader, then it is probably because you tend to resist change by making fixity out of flux. Or as Goodspeed likes to say, "trying to understand running water by catching it in a bucket."
8. Rogues to Riches, by Murray Teigh Bloom (New York: G. P. Putnam's Sons, 1971). This author went in search of investors and traders who had conquered the market because of some special insight or trading method.
9. If They're So Smart, How Come You're Not Rich?, by John L. Springer (Chicago: Henry Regney Company, 1971). Read this book and you will understand how at such a young age I came to mistrust anyone labeled as a market expert.
10. Why Most Investors Are Mostly Wrong Most of the Time, by William X. Scheinman (New
York: Weybright and Talley, 1970). Yet another book that takes an unconventional approach to
trading. Scheinman presents a methodology for measuring investor sentiment.
11. Wiped Out, by Anonymous Investor (New York: Simon & Schuster, 1966). How a typical
investor lost all his money because he thought there were experts who knew better.
12. A Fool and His Money, by John Rothchild (New York: Penguin Books, 1988). The odyssey of
an average investor as he searches far and wide for that one expert or guru who has all the answers.
The next five books are recommended for their research, indicators, and investing techniques.
13. Stocks for the Long Run, by Jeremy J. Siegel (New York: McGraw-Hill, 1998). I often use
Siegel's book as a reference when debating the perennial prophets of pessimism in the various
newsgroups.
14. Stock Market Logic, by Norman Fosback (Chicago: Dearborn Financial Publishing, 1995). If
ever updated, this investment classic would become an investment bible.
15. Winning on Wall Street, by Martin Zweig (New York: Warner Books, 1997). Zweig has
ingrained traders with the credo that you never fight the tape and never fight the Fed. After reading his book, you will understand why.
16. Stock Trader's Almanac, by Yale Hirsch (Old Tappan, NJ: The Hirsch Organization). This
reference book is updated annually and is the best source on historical seasonal trading patterns.
17. 101 Years on Wall Street, by John Dennis Brown (Englewood Cliffs, NJ: Prentice Hall, 1991).
This is my favorite reference book on the market. It covers 101 years (1890 to 1990) of market
history. It's complete with charts and statistical information, and compares all the bull and bear
markets.
18. Market Wizards (New York: Harper & Row, 1990) and The New Market Wizards (New
York: Harper Business, 1992), by Jack Schwager. There have been many books about trading
masters and mavens and what makes them tick, but Jack's interviews with the market wizards are by far the best. Beware, though: Some of these market wizards have lost their touch and have become promotional wizards, peddling systems, seminars, and fax services.
19. The Trader's Edge, by Grant Noble (Chicago: Probus, 1995). How can I not like a book in
which the author gives me three paragraphs of exposure? Yet another book that takes an
unconventional view of the trading game.
20. Winner Take All, by William R. Gallacher (Chicago: Probus, 1994). Ditto #19 about being an
unconventional trading book.
21. Trading for a Living, by Alexander Elder (New York: John Wiley & Sons, 1993). As a rule, I
dislike trading books that present a hodgepodge of trading methods. I much prefer books about one trading method and how the author made it work for him or her. But Elder's book is the exception to my rule. The first 68 pages, about the psychology of trading, are what set this book apart. This book is especially recommended for futures traders.
22. Pit Bull, by Martin Schwartz (New York: HarperBusiness, 1998). I have a thing about trading
books by real traders—and Marty Schwartz is definitely a real trader. You'll see that he is also a big believer in synthesizing indicators.
Tuesday, July 5, 2011
One Minute Teacher
by Spencer Johnson
- one of the worst one minute books i've read
- boring because very similar to one minute manager
- stopped reading at top of page p65 (hardcover) - someone was anxious to speak
- had to return because due
- think i can learn more from reading jae's TEFL stuff
NO NOTES SCANNED AS ALREADY DOWNLOADED A FEW PDF SUMMARIES OFF THE WEB + TOO MANY NOTES TO SCAN...NOT A PRIORITY RIGHT NOW.
- one of the worst one minute books i've read
- boring because very similar to one minute manager
- stopped reading at top of page p65 (hardcover) - someone was anxious to speak
- had to return because due
- think i can learn more from reading jae's TEFL stuff
NO NOTES SCANNED AS ALREADY DOWNLOADED A FEW PDF SUMMARIES OFF THE WEB + TOO MANY NOTES TO SCAN...NOT A PRIORITY RIGHT NOW.
The Price of Everything
by Eduardo Porter
- ok book but didn't finish it...no time to read it and didn't feel it told much more than freakonomics
- again, its a book that tries to teach a lot but freakonomics is still better...
Right-wingers are happier than left-wingers.
A survey by the Pew Research Center found that even as the Republican candidate John McCain headed for disaster in the presidential election of November 2008,37 percent of Republicans rate(themselves as "very happy," compared with 25 percent of Democrats. A similar trend has held since 1972, when the General Social Survey started asking the question. This is true around the world. Apparently, it has to do with the left's guilt. A study by psychologists at New York University found that the right-left happiness gap increases with deepening income inequality. This suggests people on the right are better at rationalizing inequality as a normal feature of life and feel less guilty about it.
The rich may be happier than the poor. But getting richer wouldn't make them happier, at least not for long, because they would soon adapt to their new life one rung up the income ladder and start comparing themselves with richer people.
Adaptation could be a useful trait. Economists Gary Becker and Luis Rayo argue that the ephemeral, context-dependent nature of happiness makes sense in evolutionary terms. If progress boosts our happiness only briefly, we will be motivated to constantly improve. The desire to keep up with the neighbors would work in much
the same way.The relentless drive to improve would increase our chances of survival. As Adam Smith put it 250 years ago, the idea that we can achieve happiness amounts to a "deception, which rouses and keeps in continual motion the industry of mankind."
Money makes us feel better about our lives, but so does having free time. Americans have sacrificed enormous amounts of time to achieve their unparalleled economic prosperity. Easterlin's paradoxical finding that Americans' growing wealth hasn't made us any happier is, in reality, proof that the time we spend earning money is erasing the happiness we get out of counting and spending it.
The French chose time and the Americans money because they preferred it. Their choices
should make them both happy. But there is another possible reading: Americans chose an unhappier path.
Some of the same studies that showAmericans stuck in a happiness rut since the end ofWorldWar II suggest that the French have become happier with their lot. The French work 440 hours a year fewer than Americans partly because they take sevenweeks' vacation, compared with fewer than four in the United States.They sleep the longest of all citizens of the industrial world. They spend two and a quarter hours a day on meals, an hour more than in the United States.And they devote almost an hour a daymore to leisure than Americans do.
French women spend more than twiceasmuch time as Americans on meals and almost 50 percent more on active leisure-like doing sports or going to shows.American women spend about 10 percent more time working and a third more on passiveleisure activities like watching TV.As it turns out, Americans like the French life better than their own. Researchers found that ifAmerican women were to reorganize their days to spend time as the French do, theywouldn't
be quite as happy as the French, but they would be happier than they are with the lives they lead.
The conclusion to be drawn from the American happiness paradox is not that money cannot increase happiness. It can. It simply underscores that money is not the only relevant variable. Happiness can be purchased in other currencies too. It can be bought with love. It can be bought with time. And pursuing growth at all costs can lead us to sacrifice other components of our happiness.
MANY DYNAMICS CONTRIBUTED to the decline of labor coercion. Employers who could increase production by adding more inexpensive slaves had little incentive to invest in laborsaving technologies. Coerced workers had no incentive to become more productive-because they would just be handing a higher surplus to the boss. Both these effects hindered economic progress.
In the Americas, slavery led to slower subsequent economic growth. NewWorld colonies in which slave labor was common in the 1830s,such as Jamaica and Guyana, are today much poorer than colonies in which slaverywas rare, such as Barbados or Trinidad. In the United States, states where slave labor was 'widespread in the mid-nineteenth century, such as Mississippi, South Carolina, and Louisiana, are much poorer today than free states such as Connecticut, Massachusetts, and NewJersey.
Prices provide the most important signals in an economy, guiding people's decisions on where to invest their resources to get the best return they can. People who shop around to get the best possible price for their plasma TV are doing us all a favor. They get a better machine, have more money left over to buy other things, and improve the odds of success of the company that makes good products for less, boosting the economy's efficiency. Successful technology companies that profit from the work of highly qualified workers will offer higher wages-a higher price-to attract better-qualified applicants. Workers will keep raising their qualifications as long as the return-measured in better wages-is worth the investment in time, money, and effort.
A study of the impact of economic shocks on politics between 1970and 2002 concluded that a one-percentage-point decline in economic growth leads to a one-percentage-point increase in the share of the vote going to right-wing and nationalist parties.
Still, it's hard to know what to do about bubbles, even when we know they are going to pop up time and again. The cycle of investment surge and bust can bankrupt many investors but can also do good along the way. Investment booms built upon technological breakthroughs like electricity, railways, or the Internet ultimately revolutionized the world economy-fueling surges of productivity that could-at least temporarily-justify the exuberance.
The long-standing American approach, shared by the chairman of the Federal Reserve, Ben Bernanke, as well as his predecessor, Alan Greenspan, has been that bubbles should be dealt with only after the fact. The Fed should be ready to pick up the pieces after they burst-flooding the economy with cheap money to encourage lending and help debtors avoid bankruptcy as the value of their assets deflates. But the government should do nothing to the bubbles themselves. Their point is that we can't tell when a bubble is a bubble.
Opinion surveys in the United States over the past few decades suggest that Americans
who experienced a deep recession between the ages of eighteen and twenty-five were more likely to grow up to believe that success is achieved through luck rather than effort and were more likely to support redistributing income from the lucky rich to the unlucky poor. Paradoxically, the shock also diminished their trust in public institutions, like the presidency and Congress, so even as they demanded more of government, they doubted government's ability to deliver necessary services
- ok book but didn't finish it...no time to read it and didn't feel it told much more than freakonomics
- again, its a book that tries to teach a lot but freakonomics is still better...
Right-wingers are happier than left-wingers.
A survey by the Pew Research Center found that even as the Republican candidate John McCain headed for disaster in the presidential election of November 2008,37 percent of Republicans rate(themselves as "very happy," compared with 25 percent of Democrats. A similar trend has held since 1972, when the General Social Survey started asking the question. This is true around the world. Apparently, it has to do with the left's guilt. A study by psychologists at New York University found that the right-left happiness gap increases with deepening income inequality. This suggests people on the right are better at rationalizing inequality as a normal feature of life and feel less guilty about it.
The rich may be happier than the poor. But getting richer wouldn't make them happier, at least not for long, because they would soon adapt to their new life one rung up the income ladder and start comparing themselves with richer people.
Adaptation could be a useful trait. Economists Gary Becker and Luis Rayo argue that the ephemeral, context-dependent nature of happiness makes sense in evolutionary terms. If progress boosts our happiness only briefly, we will be motivated to constantly improve. The desire to keep up with the neighbors would work in much
the same way.The relentless drive to improve would increase our chances of survival. As Adam Smith put it 250 years ago, the idea that we can achieve happiness amounts to a "deception, which rouses and keeps in continual motion the industry of mankind."
Money makes us feel better about our lives, but so does having free time. Americans have sacrificed enormous amounts of time to achieve their unparalleled economic prosperity. Easterlin's paradoxical finding that Americans' growing wealth hasn't made us any happier is, in reality, proof that the time we spend earning money is erasing the happiness we get out of counting and spending it.
The French chose time and the Americans money because they preferred it. Their choices
should make them both happy. But there is another possible reading: Americans chose an unhappier path.
Some of the same studies that showAmericans stuck in a happiness rut since the end ofWorldWar II suggest that the French have become happier with their lot. The French work 440 hours a year fewer than Americans partly because they take sevenweeks' vacation, compared with fewer than four in the United States.They sleep the longest of all citizens of the industrial world. They spend two and a quarter hours a day on meals, an hour more than in the United States.And they devote almost an hour a daymore to leisure than Americans do.
French women spend more than twiceasmuch time as Americans on meals and almost 50 percent more on active leisure-like doing sports or going to shows.American women spend about 10 percent more time working and a third more on passiveleisure activities like watching TV.As it turns out, Americans like the French life better than their own. Researchers found that ifAmerican women were to reorganize their days to spend time as the French do, theywouldn't
be quite as happy as the French, but they would be happier than they are with the lives they lead.
The conclusion to be drawn from the American happiness paradox is not that money cannot increase happiness. It can. It simply underscores that money is not the only relevant variable. Happiness can be purchased in other currencies too. It can be bought with love. It can be bought with time. And pursuing growth at all costs can lead us to sacrifice other components of our happiness.
MANY DYNAMICS CONTRIBUTED to the decline of labor coercion. Employers who could increase production by adding more inexpensive slaves had little incentive to invest in laborsaving technologies. Coerced workers had no incentive to become more productive-because they would just be handing a higher surplus to the boss. Both these effects hindered economic progress.
In the Americas, slavery led to slower subsequent economic growth. NewWorld colonies in which slave labor was common in the 1830s,such as Jamaica and Guyana, are today much poorer than colonies in which slaverywas rare, such as Barbados or Trinidad. In the United States, states where slave labor was 'widespread in the mid-nineteenth century, such as Mississippi, South Carolina, and Louisiana, are much poorer today than free states such as Connecticut, Massachusetts, and NewJersey.
Prices provide the most important signals in an economy, guiding people's decisions on where to invest their resources to get the best return they can. People who shop around to get the best possible price for their plasma TV are doing us all a favor. They get a better machine, have more money left over to buy other things, and improve the odds of success of the company that makes good products for less, boosting the economy's efficiency. Successful technology companies that profit from the work of highly qualified workers will offer higher wages-a higher price-to attract better-qualified applicants. Workers will keep raising their qualifications as long as the return-measured in better wages-is worth the investment in time, money, and effort.
A study of the impact of economic shocks on politics between 1970and 2002 concluded that a one-percentage-point decline in economic growth leads to a one-percentage-point increase in the share of the vote going to right-wing and nationalist parties.
Still, it's hard to know what to do about bubbles, even when we know they are going to pop up time and again. The cycle of investment surge and bust can bankrupt many investors but can also do good along the way. Investment booms built upon technological breakthroughs like electricity, railways, or the Internet ultimately revolutionized the world economy-fueling surges of productivity that could-at least temporarily-justify the exuberance.
The long-standing American approach, shared by the chairman of the Federal Reserve, Ben Bernanke, as well as his predecessor, Alan Greenspan, has been that bubbles should be dealt with only after the fact. The Fed should be ready to pick up the pieces after they burst-flooding the economy with cheap money to encourage lending and help debtors avoid bankruptcy as the value of their assets deflates. But the government should do nothing to the bubbles themselves. Their point is that we can't tell when a bubble is a bubble.
Opinion surveys in the United States over the past few decades suggest that Americans
who experienced a deep recession between the ages of eighteen and twenty-five were more likely to grow up to believe that success is achieved through luck rather than effort and were more likely to support redistributing income from the lucky rich to the unlucky poor. Paradoxically, the shock also diminished their trust in public institutions, like the presidency and Congress, so even as they demanded more of government, they doubted government's ability to deliver necessary services
Monday, June 27, 2011
What Now?
"What Now?" by Ann Patchett
- Sometimes the circumstances at hand force us to be braver than we actually are, and so we
knock on doors and ask for assistance. Sometimes not having any idea where we're
going works out better than we could possibly have imagined.
- It was for me the start of a lesson that I never stop having to learn: to pay attention to
the things I'll probably never need to know, to listen carefully to the people who look as if
they have nothing to teach me, to see school as something that goes on everywhere, all the
time, not just in libraries but in parking lots, in airports, in trees.
- he did teach me something I should have known all along: people need to
talk, and often a willingness to sit and listen is the greatest kindness one person can offer
to another. One of the first lessons of childhood is to be wary of strangers, and while this
is good counsel to guard against the world's very small nefarious element, it also teaches
us to block out the large majority of those who just have something on their mind
they'd like to say.We are taught to be suspicious, especially of anyone who might not
look like us or share our beliefs. Bythe time we reach adulthood, many have perfected the
art of isolation, of being careful, of not listening in the name of safety. But the truth
is that we need to hear other people, all people, especially in those moments when
we don't know exactly where we're going ourselves. When it comes to finding our way we're better off taking in as much information from as many sources as possible.
- wouldn't it be even crazier not to listen to people or to make up your mind against them based on the most superficial bit of information, say a saffron robe, perhaps? For the most part wisdom comes in chips rather than blocks. You have to be willing to gather them constantly, and from
sources you never imagined to be probable. No one chip gives you the answer for everything. No one chip stays in the same place throughout your entire life. The secret is to keep adding voices, adding ideas, and moving things around as you put together your life.
- How much sadness could be averted by taking the time to notice all the people we have come to ignore? Would we in fact be safer and not more at risk if we asked someone to voice his
feelings rather than wait until he looked for other means of making himself heard? The
world may be telling you to go forward, to climb and to strive and to move briskly
ahead, but while you're doing all that, be sure to keep your ears open. Divest yourself of
prejudice whenever possible.
- As quicldy as you think that everything is set, it all becomes unglued again. A huge part of this is simply luck, the element of life both good and bad that is beyond our control. Sickness comes into the picture of perfect health, true loves catches your eye just as you were setting your foot on the train that would have taken you away forever. Babies are born, jobs are lost, fortunes
are made. Wars and suffering pull us backwards while science gives us a second chance
we never thought possible. Even if you have it all together you can't know where you're
going to end up. There are too many forces, as deep and invisible as tides, that keep us bouncing into places where we never thought we'd wind up. Sometimes the best we can
hope for is to be graceful and brave in the face of all of the changes that will surely come. It
also helps to have a sense of humor about your own fate, to not think that you alone are
blessed when good fortune comes your way, or cursed when it passes you by. It helps if
you can realize that this part of life when you don't know what's coming next is often the
part that people look back on with the greatest affection. In truth, the moment at which
life really does become locked down, most of us are overcome by the desire to break it all
apart again so that we can reexperience the variables of youth.
- It turns out that most positions in life, even the big ones, aren't really so much about
leadership. Being successful, and certainly being happy, comes from honing your skills
in working with other people. For the most, part we travel in groups-you're ahead of
somebody for a while, then somebody's ahead of you, a lot of people are beside you all
the way.
- The secret is finding the balance between going out to get what you want and being open to the
thing that actually winds up coming your way.What now is not just a panic-stricken
question tossed out into a dark unknown. What now can also be our joy. It is a declara-
tion of possibility, of promise, of chance. It acknowledges that our future is open, that we
may well do more than anyone expected of us, that at every point in our development we
are still striving to grow.There's a time in our lives when we all crave the answers. It seems
terrifying not to know what's coming next. But there is another time, a better time, when
we see our lives as a series of choices, and What now represents our excitement and our
future, the very vitality oflife. It's up to you to choose a life that will keep expanding. It
takes discipline to remain curious; it takes work to be open to the world-but oh my friends, what noble and glorious work it is. Maybe this is the moment you shift from seeingWhat now as one more thing to check off the list and start to see it as two words worth living by. This is the day you leave this campus, but if you keep your heart and mind open and are willing to see all of the possibilities that are available to you, it will only be the start ofyour education.
- If you're trying to find out what's coming next, turn off everything you own that has
an OFF switch and listen. Makeup some plans and change them. Identify your heart's truest
desire and don't change that for anything. Be proud of yourself for the work you've done. Be grateful to all the people who helped you do it. Write to them and let them know how
you are. You are, every one of you, someone's favorite unfolding story. We will all be anx-
ious to see what happens next.
- never read a book so fast in my life....all in 1 hr before i went to sleep
- very fun read and filled with a fun interpretation of all the wisdom u might want to hear as a graduate or someone embarking on a new adventure.
- Sometimes the circumstances at hand force us to be braver than we actually are, and so we
knock on doors and ask for assistance. Sometimes not having any idea where we're
going works out better than we could possibly have imagined.
- It was for me the start of a lesson that I never stop having to learn: to pay attention to
the things I'll probably never need to know, to listen carefully to the people who look as if
they have nothing to teach me, to see school as something that goes on everywhere, all the
time, not just in libraries but in parking lots, in airports, in trees.
- he did teach me something I should have known all along: people need to
talk, and often a willingness to sit and listen is the greatest kindness one person can offer
to another. One of the first lessons of childhood is to be wary of strangers, and while this
is good counsel to guard against the world's very small nefarious element, it also teaches
us to block out the large majority of those who just have something on their mind
they'd like to say.We are taught to be suspicious, especially of anyone who might not
look like us or share our beliefs. Bythe time we reach adulthood, many have perfected the
art of isolation, of being careful, of not listening in the name of safety. But the truth
is that we need to hear other people, all people, especially in those moments when
we don't know exactly where we're going ourselves. When it comes to finding our way we're better off taking in as much information from as many sources as possible.
- wouldn't it be even crazier not to listen to people or to make up your mind against them based on the most superficial bit of information, say a saffron robe, perhaps? For the most part wisdom comes in chips rather than blocks. You have to be willing to gather them constantly, and from
sources you never imagined to be probable. No one chip gives you the answer for everything. No one chip stays in the same place throughout your entire life. The secret is to keep adding voices, adding ideas, and moving things around as you put together your life.
- How much sadness could be averted by taking the time to notice all the people we have come to ignore? Would we in fact be safer and not more at risk if we asked someone to voice his
feelings rather than wait until he looked for other means of making himself heard? The
world may be telling you to go forward, to climb and to strive and to move briskly
ahead, but while you're doing all that, be sure to keep your ears open. Divest yourself of
prejudice whenever possible.
- As quicldy as you think that everything is set, it all becomes unglued again. A huge part of this is simply luck, the element of life both good and bad that is beyond our control. Sickness comes into the picture of perfect health, true loves catches your eye just as you were setting your foot on the train that would have taken you away forever. Babies are born, jobs are lost, fortunes
are made. Wars and suffering pull us backwards while science gives us a second chance
we never thought possible. Even if you have it all together you can't know where you're
going to end up. There are too many forces, as deep and invisible as tides, that keep us bouncing into places where we never thought we'd wind up. Sometimes the best we can
hope for is to be graceful and brave in the face of all of the changes that will surely come. It
also helps to have a sense of humor about your own fate, to not think that you alone are
blessed when good fortune comes your way, or cursed when it passes you by. It helps if
you can realize that this part of life when you don't know what's coming next is often the
part that people look back on with the greatest affection. In truth, the moment at which
life really does become locked down, most of us are overcome by the desire to break it all
apart again so that we can reexperience the variables of youth.
- It turns out that most positions in life, even the big ones, aren't really so much about
leadership. Being successful, and certainly being happy, comes from honing your skills
in working with other people. For the most, part we travel in groups-you're ahead of
somebody for a while, then somebody's ahead of you, a lot of people are beside you all
the way.
- The secret is finding the balance between going out to get what you want and being open to the
thing that actually winds up coming your way.What now is not just a panic-stricken
question tossed out into a dark unknown. What now can also be our joy. It is a declara-
tion of possibility, of promise, of chance. It acknowledges that our future is open, that we
may well do more than anyone expected of us, that at every point in our development we
are still striving to grow.There's a time in our lives when we all crave the answers. It seems
terrifying not to know what's coming next. But there is another time, a better time, when
we see our lives as a series of choices, and What now represents our excitement and our
future, the very vitality oflife. It's up to you to choose a life that will keep expanding. It
takes discipline to remain curious; it takes work to be open to the world-but oh my friends, what noble and glorious work it is. Maybe this is the moment you shift from seeingWhat now as one more thing to check off the list and start to see it as two words worth living by. This is the day you leave this campus, but if you keep your heart and mind open and are willing to see all of the possibilities that are available to you, it will only be the start ofyour education.
- If you're trying to find out what's coming next, turn off everything you own that has
an OFF switch and listen. Makeup some plans and change them. Identify your heart's truest
desire and don't change that for anything. Be proud of yourself for the work you've done. Be grateful to all the people who helped you do it. Write to them and let them know how
you are. You are, every one of you, someone's favorite unfolding story. We will all be anx-
ious to see what happens next.
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