Wednesday, August 10, 2005

Make sure you have a chair

"There are a lot of momentum traders in the market who shoot first and ask questions later and if you follow them often you end up without a chair when the music stops."

Brandon Fredrickson said this in a post he made today. What a great quote. I thought it would be good to post here in case anybody is reading this blog and putting on any trades that I talk about, because I do identify good opportunities every now and then on this blog.

I try to spend way more time talking about strategy and technique than specific trades, and when I do talk about specific trades it is almost always to illustrate a technique. I don't know if anybody noticed, but I rarely talk about how I plan to get out of something, because most of my trades end in one of two ways: it becomes clear to me that the price will most likely move against my position significantly, or hanging on any longer will cost me more than I'm willing to lose (which isn't much). Anyway, the point is this, make sure you have a chair. Make sure you have a chair!!


At 6:04 PM, Anonymous Anonymous said...


I remember Warren Buffett talking about this once. He said owning a falling stock is like sitting in a burning theater...and the only way you can leave the theater is to persuade someone else to take your seat(every seller needs a buyer). when the theater is burning...there are more people wanting out of the theater than wanting finding someone to take that seat is a tricky exercise.

I like the 'Boris exit'.

Kevin Pickell

At 1:22 AM, Blogger Frank Chiu said...

Hey Jon, what do you think of YHOO with all the talk about Alababa?

At 8:43 AM, Blogger jontait said...

YHOO is sorta outside of my element. I can't give you an informed opinion about it.


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