You Can't Beat the Market
"So it is with market operations."
Today’s master teacher is Jesse Livermore, from his classic book, “How To Trade in Stocks.”
The Old Adage
We hear it all the time from the ‘hodlers’ of value stocks all the time. “You can’t beat the market, so why try.”
And there is a lesson here, but it isn’t the one the these long-term speculators would want us to believe.
What do they mean by this? They mean to say that we cannot beat the index, not the market. And with the thousands of successful speculators that have existed and do exist today, the obvious truth is that we can, in fact, beat the index.
However, can we beat the market?
“Can’t Beat the Races”
The simple answer is, no. We cannot beat the markets.
Jesse Livermore, our master teacher, says it this way.
"There is a very true adage: ‘You can bet a horse race, but you can't beat the races.’ So it is with market operations. There are times when money can be made investing and speculating in stocks, but money cannot consistently be made trading every day or every week during the year.”
What does this mean? It simply means that the market, today, has a certain type of personality—a certain way of working.
There are times when the market condition is favorable to our style of trading, and times when it isn’t. It is a fool’s errand to try to force the market to give us what we want.
The intelligent speculator waits for the proper conditions, the proper setup, and for everything to align perfectly—and knows that it is only at this point that the odds are in their favor.
And it is at this proper time that they move into the market with determination and strength.
You don't have to swing hard to hit a home run. If you got the timing, it'll go.
-Yogi Berra—Legendary Baseball Player
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