Art of War

Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby winston » Mon May 19, 2008 6:19 pm

kennynah wrote:You must learn through planning.
You must question the situation.
The Art of War 1:2.1-2

Plan an advantage by listening.
Adjust to the situation.
Get assistance from the outside.
Influence events.
The planning can find opportunities and give you control.
The Art of War 1:3.1-5


We must always ask the right questions..

Recently, when Chinese coals counters dropped a lot, I asked an Analyst whether it is a good time to buy. His answer was "not really" as the coal companies are now at "mid-cycle". I left things at that and did not buy.

Instead, I should have asked,"What would be the catalysts that would drive these coal counters higher from here ?".

If I had asked this question, he would have said high oil prices. And thereafter, all I have to do was to decide whether oil prces were going up or not.

Anyway, the Chinese coal counters have gone up a lot since I looked at them. I did not buy because I did not ask the right questions :( . Also, I give too much credit to the analysts. I always think that they know more than me..
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby kennynah » Mon May 19, 2008 6:23 pm

W : u r very astute in making this parallel....

to add on, we also have to question our earlier assumptions from time to time...this is becos events change and that may challenge our previous assumptions as well...
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Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby winston » Tue May 20, 2008 12:07 am

kennynah wrote:<< Why are we buying ? Why are we selling ? Can we explain that clearly ? >>

Dear W : i always only have one answer to above question...which is to profit from all positions i take



Hi k,

I did not really explain myself clearly on this one..

I meant to say that when we are long something, we must always have a reason for doing so.

Example:- I'm buying this stock because :-
1) it's PEG is 0.5
2) it's RNAV is 2 times it's current price
3) it's has dropped 50% and fundamentals have not changed
etc..

We have to be very clear why we've taken that long position. This is because if things do not pan out the way we have expected, then it is time to close that position.

The same argument applies to the selling. I'm selling this stock because :-
1) it's PEG is now 2
2) it's price = RNAV
3) fundamentals have detiorated and will not improve in the medium term
4) it has hit my mental Stop-Loss
etc..


Take care,
Winston
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Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby kennynah » Tue May 20, 2008 12:10 am

thanks W. U r as always very meticulous:) n great clarifications
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Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby winston » Tue May 20, 2008 9:05 pm

kennynah wrote:Always arrive first to the empty battlefield to await the enemy at your leisure.
If you are late and hurry to the battlefield, fighting is more difficult.
You want a successful battle.
Move your men, but not into opposing forces.
Art of War 6:1.1-4



1) Always plan your strategy before the market opens. When the market opens, it is the time to execute your strategy not the time to be planning your strategy.

2) Always try to be ahead of the curve. Always anticipate outcomes and assign probabilities to those outcomes.

3) Always try to know when earnings would be announced and what the earnings estimates are. Thereafter, anticipate whether your stocks is going to perform below or above expectations.

4) Always try to anticipate what an influential Analyst, would be recommending on your stock ie. Buy, Sell or Hold and why..
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Re: (Recompose) Art of War - Profit the Sun Tze Way

Postby winston » Tue May 20, 2008 9:47 pm

kennynah wrote:You must know the battleground.
You must know the time to battle.
You can then travel a thousand miles and still win the battle.
Art of War 6:6.1-3


There is a time to chase a stock and there is a time to wait for the correction before buying.
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The 36 Strategies

Postby millionairemind » Mon Jun 30, 2008 9:25 am

I am currently reading this book called SUN TZU'S ART OF WAR for Traders and Investors.

One of translated article from Art of War to trading reads as follows:

Sun Tzu Said...
that when armies engage in actual fighting, if victory is long in coming, the men's weapons will become dull and their enthusiasm will wane (THINK IRAQ ;))

This is particularly true for professional trader but is also applicable to individual investors who have become desperate to make up for a loss. Do not overtrade. if you trade for a long time, you will lose the edge and start taking chances and foolish risks. The inevitable result will be a string of losing trade.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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The 36 Strategies

Postby helios » Mon Jun 30, 2008 9:36 am

millionairemind wrote:I am currently reading this book called SUN TZU'S ART OF WAR for Traders and Investors.

One of translated article from Art of War to trading reads as follows:

Sun Tzu Said...
that when armies engage in actual fighting, if victory is long in coming, the men's weapons will become dull and their enthusiasm will wane


noted, which author/ chapter is that? can u do some excerpts & file it in e forum?

thanks MM.
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Re: The 36 Strategies

Postby millionairemind » Mon Jun 30, 2008 9:40 am

Author - Dean Lundell

As for excerpts - The whole book is 215 pages long.. Every odd page contains a Sun Tzu's teaching and every even page is the interpretation and how it can be applied to the mkt.. not sure if I can type so much :lol:

It is available in the library for those interested.

Say is say, it is still the practitioner who's got to have the discipline to adhere to his own trading system that matters.. ;) (pardon the singlish)
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: The 36 Strategies

Postby helios » Mon Jun 30, 2008 10:09 am

Oooo ... nope, a summary will do mah; ah-ken has a thread on Sun Tze (i juz feel that it's a pity e thread is not updated).

yeah, one can feel free to share how all these relate to trading strategies (or situations). If MM can say his experience, it'll certainly help a lot.
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