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Harry Browne's 16 Rules.

Discussion in 'Investing Strategies' started by Johny_come_lately, 4th Feb, 2012.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

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    1'st Rule.

    Wealth is created from your job.

    You are more likely to make money from your career or business than from your investments. Few make a large fortune from their portfolio.

    Your future retirement can be made secure with your investments. But don't expect to go from rags to riches. Taking risks from complicated schemes in the hope of quick money, is not ideal. Your financial plan, should be, aimed at capital preservation and preserving loss (from government or mismanagement).
     
  2. Terryw

    Terryw Well-Known Member

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    This is so true!
     
  3. Johny_come_lately

    Johny_come_lately Well-Known Member

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    2nd Rule.

    Don't assume you can replace lost wealth.

    Just because you have earned a nest egg doesn't mean it can be replaced if it is lost. Markets, opportunities, technologies and laws all change. Conditions today may be vastly different from wealth creation in the past. Regulation is making it harder to amass wealth.

    So treat what you have, as precious. Don't take any chances, assuming that a fortune can be re-earned.
     
  4. wdongli

    wdongli Well-Known Member

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    Wealth is created from your job? As all of truth there are conditions and context.

    What are the conditions and contexts for wealth from your job? Job is nothing about wealth if you could not put something aside and put it wisely for more. Business usually is taken as a way to expand your financial base bit by bit. Job usually is taken as the way for living and cash income. Unfortunately most of people get the job for cash income and fail to expand their financial base.

    ***
    Could you get your job as your business? Could you be a businesslike market player with your goal, plan, and intelligent judgment, or worker for your job and income reasonable or gambler for fortune quickly.

    Wealth is created from the job is true when you deal with your job in the right way and proper behavior. Not right mind for the job? It could not create the wealth but just fill the mouth and what your necessities plus some saving and you have no idea how to use your saving.

    ***
    Trading could be a job for cash income but most of people fail to do their jobs. A tiny mistake could result in very serious bad consequence even you could still be quite experienced, knowledgeable, and intelligent. Once a tiny mistake result in unaffordable losses, genius becomes bum and idiot.

    Business is a way to the fortune if you could have vision, gut for the first, lucks to make the decision at the right times in most of time, and would like to take it as your life job. Most of people who dare to start their business have found they have to close the doors at last since they are not businessman in nature.

    ***
    Stopping losses works in most of time but it often than not to leave the users in the empty stations with the ticket at extremely high cost but the train left without them or put the users in the ruins to cry...

    Ordinary jobs are safe and could be very rewarded but most of people due to some unlucky reasons just could not use the salaries to accumulate enough wealth. So most of people in all of society have one thing only: they just fail to accumulate the wealth from their jobs!

    ***
    So in Chinese it is said you could try to get the fortune and you have to but don't feel too disappointed if you could not since somethings definitely are out of your control. Not all of wise explorers could get what they want.

    Wealthy comes from jobs? It sounds too good to be true as that trading success comes from stopping losses!

    So don't forget if some money is big enough, put it in the safe box first and think how to use them for better results.
     
    Last edited by a moderator: 5th Feb, 2012
  5. Johny_come_lately

    Johny_come_lately Well-Known Member

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    3rd Rule.

    Know the difference between speculating & investing.

    When you invest, you acknowledge the return of the markets. When you speculate, you attempt to do better than other investors, through timing, forcasting and stock selection, under the mantle that you are smarter than all other investors. Speculating isn't wrong, as long as it is used with money you can afford to lose. Wealth that is precious should not be used on a wager to beat other investors.
     
  6. wdongli

    wdongli Well-Known Member

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    Don't trust "stopping loss" and never buy for stopping losses! It is a game as rolling snowball. Why did Livermore failed at last? He kept to put his smallball on the fire. Wisdom requires you keep most of your snowall into a trusted fridge and be sure the power is always on. Restarting is difficult if the ball breaks out when it is already big enough.

    No one wants to commit suicide unless he was in extremely depression and feels hopeless completely. No one could get enough smallball if he just stay in the offices to drill some holes. Be safe for your portfolio and be affordable for any hitting out.

    Human makes his mistakes. Fortune comes from risks but any errors could burn it down. Making money is hard and keeping the money growing is harder. Never buy if you would be very painful when something wrong and your money just is gone.

    Any buying means risks. Could you stop buying? It is about how to buy and how to get balance between the safety of your portfolio and the risk for any single transaction. Each transaction means some risks but your portfolio should be safe under all of conditions.
     
    Last edited by a moderator: 9th Feb, 2012
  7. wdongli

    wdongli Well-Known Member

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    Smart and wisdom are different matters. Speculating and investing are hard to be classified sometimes. Both need the wisdom more than smart. Both could not be used for sure for good enough returns. The internet makes everything changed in seconds.

    It is good to tell difference between them. But without matter you is speculating or investing, you have to be affordable for the money you put into the market. We are humans and we could be wrong. Speculator should be affordable but investor should be so too.

    You must be safe for your financial foundation. You must leave the buffers for your human errors. It is important you know some rules but don't be blind to follow when the conditions are against them.

    To be wise you have to invert what you see and thought. One thing could be played wisely in one time but could be stupid in another time. How do we use the rules?
     
    Last edited by a moderator: 10th Feb, 2012