The Decalogue

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The Disciplined Investor

1. Markets are always right and are the only judges of themselves.
2. The only reality that matters is the price trend.
3. The most important rule in the markets is: limit losses.
4. It does not exist “high / low”, “overbought / oversold”: markets may exceed any rational prediction both in terms of price and in terms of time, before returning to levels consistent with the feedback.
5. It’s totally unnecessary and counterproductive to “predict” markets.
6. The most wrong and detrimental attitude in the markets is to fight them, trying to take “the” minimum and “the” maximum.
7. The only winning attitude in the markets is discipline.
8. The only concrete way to use the markets efficiently is go along with them.
9. In the absence of extraordinary powers of clairvoyance, the best plan is a diversified portfolio, not correlated and combined with an algorithm that controls the risk in downturns.
10. Liquidity is not a “no-choice” but a very important asset.