Tackle Today: Preserve & Run
February 13, 2020
≈ Vitamins & Aspirins ≈
“George Soros has a philosophy that I have also adopted: The way to build long-term returns is through preservation of capital and home runs. You can be far more aggressive when you’re making good profits. Many managers, once they’re up 30 or 40 percent, will book their year [i.e., trade very cautiously for the remainder of the year so as not to jeopardize the very good return that has already been realized].”
Stanley Druckenmiller to Jack D. Schwager in “The New Market Wizards: Conversations with America’s Top Traders”. —
Long Word, short Excel. By reading books like Schwager’s and getting to know what’s inside the head of the greatest traders and investors of all time, you can improve your wealth-building process waaaay more than you suppose. Knowledge is exponential and its thorough application can turn things that once were linear into exponential as well.
The problem with most inexperienced traders is that they take Druckenmiller’s approach and turn it upside down: home runs first and then preservation of capital. If they’re working with a POP that is somehow near 50%, and they do not position size it appropriately, they won’t have any capital to preserve.
Wealth-building can be UNcomplicated with the usage of three boxes:
Box 1: Safety net: This is your safeguard against a possible hardship. If you can keep here at least 6 months’ worth of bills, congratulations.
Box 2: Retirement: Here’s where you marry profitability with safety for consistent long-term wealth creation.
Box 3: Capital Growth/Home runs: Here you go for the jugular prioritizing profitability and liquidity over safety taking risks with method and diversification.
This is how you take care of your financial future: As long as there is bamboo, there will be arrows.
Remember, first vitamins, then aspirins.
Chart of the Day
Coronavirus Global Cases (2019)
Video of the day
Trading Justice Interviews: Jack Schwager – The New Market Wizards
In this episode of the Trading Justice Podcast, we welcome Jack Schwager for a discussion on trading, writing and the current state of the markets.
Traders Lounge 11 PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
The Tackle Today series is brought to you by Tackle Trading.
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
# Sign up now for a 15-DAY FREE TRIAL #
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
