How to Invest for Profits and Joy

I love this quote from Hugh Hendry – Hendry once said to an interviewer: “To my mind, the three most important principles when it comes to investing are Albert Camus’ principles of ethics: God is dead, life is absurd and there are no rules.” He suggested that a great fund manager was defined by “an ability to establish a contentious premise outside the existing belief system, and have it go on and be adopted by the rest of the financial community”.


My investing life has had many drawdowns, but after years of learning, full of profit and joy. I believe we can accelerate this journey. I want to start packaging this idea better.

I am constantly asked how to make money in stocks and investing. I have started to write this post 100 times. It’s almost impossible to teach people ‘HOW TO’ invest, but people can learn for sure.

The easiest start point would be to cut the list down to the bone and post it. Here goes:

1. Do not let trades become investments, but it is ok to let investments become trades.

2. Personality first. Know yourself! (The markets will exploit your weaknesses)

3. Develop your own approach.

4. Be flexible because you will be very wrong.

5. Find mentors. Today! Don’t expect anything from them.

6. START today. While learning how to invest, decide on an amount that you can invest in the markets and dollar cost average. Invest an equal amount of money once a month or quarter for a long period of time.

7. Keep your costs down.

8. Focus on your strengths, invest some profits in your weaknesses.

9. Do not ‘practice’ investing and do not call your investing money ‘Vegas’ money. Develop a routine.

10. Write it down! Start a journal.

11. Immerse yourself in the language of the markets and investing. It has never been easier.

12. Knowing when and how to sell remains the most mystical of processes. I just say do it consistently. There is no shame in leaving money on the table.

PS – Listen to this great interview of Jack Shwagar and read his books if you want to invest your’s or other people’s money.

PSS – There is no ‘one’ book, though I enjoyed ‘Reminiscenses of a Stock Operator‘. You can’t go wrong reading it.

Hope this helps a little bit. Chime in with other thoughts of course and I will continue to refine.


  1. soolebop says:

    good post. i think “Find Mentors” should be number 1 but all i all good post. and Mr. Schwager and his books are top flight stuff. Thanks for sharing. For someone doing it as well as you are it’s really nice of you to share your thoughts, thanks again.

  2. Good stuff. #1 is great advice. I would have more money if I’d let some of my investments become trades. Working on that along with #4. #3 just as important too.

    • i see so many of my friends buried to the tune of 30-100k in Facebook IPO. Thats just the most recent example. They toop IPO shares for the flip and have held. now they are just holding and locked in.

  3. MarketShot says:

    I have three to add that apply although the statements were made before the stock market existed.

    After a good trade remember:
    “Even on the most exalted throne in the world we are only sitting on our own bottom. -Michel de Montaigne

    On the existence of “hope” for a stock to move your way:
    “Hope in reality is the worst of all evils, because it prolongs the torments of man.” ~Friedrich Nietzsche

    On listening to others who “strongly believe” that a stock will turn in some way:
    “In faith there is enough light for those who want to believe and enough shadows to blind those who don’t.” – Blaise Pascal

  4. leopardtrader says:

    Very nice post. It remains if only participants will listen instead of chasing elusive millions without hard work. I consider Reminiscences of Stock Operator as a Bible for investors/traders. That is the only book I read ..and i do all the time. IMO it pretty difficult to understand the market without really assimilating the thoughts of Jesse Livermore

  5. David Owen says:

    ExItIng trades Is actually really easy. You just need to spend more time on Twitter Howard. Everyone on there knows how to sell at the top. That’s why cashtags are such a threat……….

    Great post, as a quant focused trader/investor I would probably add try to trader towards moving averages rather than away from them. Statistically and historically ensuring probability is on your side can assist greatly in mitigating risk. “Knowing your risk fIrst” was the most important attitude shift for me personally making the transition to consistent returns.

    Hope folks add to this, could end up a really great comment thread.

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  7. Jack Damn says:

    Great post Howard.

    #5 Find mentors.
    A good mentor is important. I really, really wish I would have done that early on in my trading journey. I’m currently looking for a mentor to help me with my discipline and mental confidence. I began searching last week. I need to “up my game”, but I think I need a fresh perspective instead of going it alone this time.

  8. Gordon Bowman says:

    Nice video of Jack Schwager. I have read two of his books and definitely recommend them. Seems that the two main common threads he’s seen across all of his interviews (which I noticed are both on your list as well) are:

    1. Know yourself and find an approach that works to your personality
    2. Flexibility

    The one quote that jumped out to me in his video was his line on flexibility:

    “Good traders liquidate when they’re wrong. Great traders reverse when they’re wrong.”

    I’m still working on number 1 though. I think it might be a multi-year endeavor. If not a continually evolving lifetime endeavor.

    • ►►► says:

      “Good traders liquidate when they’re wrong. Great traders reverse when they’re wrong.” => I can indeed confirm this. Some of my best (intraday) trades ever have been trades that I reversed (from long to short or short to long in one shot) as I realized that the market was against me…

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