trading and gamblingThere is a difference between trading and gambling. The moment, one’s hope went beyond the logic, it becomes gambling. In trading, everyone goes through it. At the end, many realized that seeking 1000% return is no different from buying 649. The key is consistently run a portfolio with over 20% gain per year on an interest down cycle (1981 to today) and 10% gain on interest up cycle (1963 to 1980). You would be a very, very rich man by age of 50, if you can do that from age with 30 with average income.
The best go through gambling mentality in three months. The worst one never goes beyond gambling. If you feel that you need to say something such as, “it is the most undervalued stock” every day, you have a problem – gambling addiction. There are people does that every year. Getting the year end bonus and blow up in one junior minning, biotech, infotech, or any flavor of the year. Then, wish it to go up. Yes, they may have one win. But, those people will always lose, since they will always put their winning into the next big thing, then lose every thing. Those people have one bad tendency, they never sit down figure out his performance for the past five years – they are in constant denial. Like all addiction, one must face the reality, one must face the fact – look at all one’s investment in the five years. What it would be, if one bought Canadian government saving bond, what it would be, if one bought the index. If you cannot even outperform the saving bond over the term of five years, you are the problem – not “it will go up next year”.