As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"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." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Tuesday, 6 January 2015

Jesse Livermore's Golden Money Management Rules



Keep cash in reserve.  

Livermore says you should resist the temptation to be in the market all the time.  Again, patience is a virtue and waiting for the right opportunity is better than being foolishly invested.  There are times when you should be 100% in cash.


Park 50% of your profits from a successful trade, especially where you doubled your original capital. Put it in the bank, hold it in reserve.”  
 
 
This, in fact, is the rule Livermore regretted not paying enough attention to. He went broke a number of times from not following his rules.



Good time for Uncle8888 to remind himself again!



Compounding investment gains year on year is what many retail investors like to think. Up, up, up and away!


No. We must pay more attention to Jesse Livermore's Golden Money Management Rules which he himself regretted not paying enough attention to them.


The Truth is Mr. Market can give; but can also easily take it back without giving us any advance notice. By the time, we realize it it is often too little late!






















 More cash is rotting?

 








3 comments:

  1. Charles Munger "There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back"

    ReplyDelete
    Replies
    1. His boss, Warren Buffet may not agree. Ha Ha!

      May be what he said was before he worked for Buffet?

      Delete
  2. This comment has been removed by the author.

    ReplyDelete

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