Learning from the Great Ones

Wang Jin

I had a couple of books arrive yesterday. One of them is a regrettable choice: Learning Learning from Data: Concepts, Theory, and Methods from Data: Concepts, Theory, and Methods, Cherkassky, Mulier. The idea of the book is for people who must understand the principles and methods for learning dependencies from data. If I get through this book, I might as well read Krugman's series. It is a dense volume.

The other book was a slim and easily read volume, Lessons from the Great Traders, John Boik. He has a website and a tab for "Monster Stocks, the name of his most recent book. There's some names posted that you might find interesting.

It is always refreshing to read about successful investors. It was affirming to read that each of the investors that Boik profiles (Darvas, Livermore, Baruch, O'Neil) each went through a learning process that involved skinned up knees and kick or two in the stomach and ass. Nevertheless, they learned from their mistakes and ultimately prevailed.

As Boik notes, there is nothing easy about making money in the stock market. There is certainly the perception that choosing winning stocks is easy--and that is ultimately the allure. I think that Stan Weinstein said it best: That the market's objective is to take the money out of the pockets of many and put it in the pockets of a few. There's also a perception that when you buy a stock in a raging bull market, your performance is directly linked to your genius. It's not easy and everyone looks like a genius in a bull market.

You may also find some well done articles at Market Masters. Lots of good stuff at that website. I go back and re-read the profiles, again for knowledge and inspiration. I particularly like the article on Richard Donchian (maybe because of his Armenian heritage!). But there are some timeless investment/trading rules here that you may wish to print out and post handy to your workspace.

As I think about my own bumpy process as an investor, I realize that my embrace of these books was through shared experience: I made all the mistakes that they made. Accordingly, reading about these very successful investors doing the same assuaged a bit of the shame and embarrassment of having committed those same errors.

Overconfidence, not knowing what you do not know, lack of discipline all conspire against one's investment success.