naved-abdali Quotes About trading

“The government wants to keep the capital markets healthy and thriving. They will do whatever in their power to avoid or reverse a recession.”

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Author:Naved Abdali

“Market price matters at only two points in time. When you buy and when you sell. In between, it is only a distraction.”

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Author:Naved Abdali

“Broad-market indexes like S&P 500 must rise over the long term. The upward path is the only logical direction. Prices can be suppressed for a short period, but eventually, the index will continue its course.”

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Author:Naved Abdali

“Always remember that the minority dictates the prices, and the majority governs the value.”

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Author:Naved Abdali

“It is impossible to say whether an asset class valuation is cheap or expensive in isolation. The valuation of an asset is relative to the valuations of all other assets.”

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Author:Naved Abdali

“The number one reason people lose money in investing is because they buy assets without giving any thought whatsoever to the fair value.”

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Author:Naved Abdali

“If investors do not know or never attempt to know the fair value, they can pay any price. More often, the price they pay is far greater than the actual value.”

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Author:Naved Abdali

“If you have some working knowledge of business and accounting and have a lot of patience to ride out market ups and downs, you can be a stock picker. You just need to understand that stocks are proportionate ownership of earning businesses.”

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Author:Naved Abdali

“There is no need to be a warrior of your investment community. You don’t invest to prove a point or to protect an investment ideology. There is only one goal; grow your pile of capital over time.”

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Author:Naved Abdali

“I believe when using leverage, the following four conditions must be met. 1. Leverage must be in the general direction of a secular trend. 2. Leverage should never expire. 3. Leveraged positions should not be subject to forced sell. 4. The maximum possible loss should not be more than the invested capital.”

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Author:Naved Abdali

“Greed and fear are both good and healthy for an investor and capital markets as a whole. Emotions are like fire, beneficial if controlled, destructive if wild.”

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Author:Naved Abdali

“Traders and investors are humans, full of emotions, behavior biases, and good and bad past experiences. We don’t have much control over psychological shortcomings, and we routinely make decisions contaminated with our emotions and biases.”

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Author:Naved Abdali

“It may take some time, but capital will eventually flow to the most logical place.”

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Author:Naved Abdali

“Capital efficiently and frequently flows between bonds and stocks. It pays to keep an eye on yields offered by these markets.”

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Author:Naved Abdali

“Generally, a cheap stock is cheap for a reason. If you don’t know the reason, you will be better off investing your capital elsewhere.”

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Author:Naved Abdali

“If you are leveraged five times of your capital, a 20% move in your preferred direction can double your capital, but a similar move in the opposite direction can wipe you out.”

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Author:Naved Abdali

“The actual risk is the permanent loss of capital or, to a lesser extent, a sub-par return. Temporary volatility in market price is not a real risk.”

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Author:Naved Abdali

“All capital investments inherently suffer the risk of permanent capital loss. As an investor, it is your job to differentiate between market volatility and a permanent capital loss. You can only achieve this when you fundamentally understand why you bought the asset in the first place.”

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Author:Naved Abdali

“When you invest in stocks or any other asset, your primary risk is the permanent loss of capital. Your secondary risk is a sub-par return, and that’s it. You don’t have any other risk.”

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Author:Naved Abdali

“Market participants are humans, and so are their behaviors.”

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Author:Naved Abdali

“Humans’ reactions are contaminated with their cognitive biases, greed, fear, and survival instinct. However, capital market success requires precisely the opposite behavior of what your intuition is suggesting.”

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Author:Naved Abdali

“Money managers tend to make irrational decisions just to protect their calendar year performances, even if they believe that decision is not in the best interest of investors.”

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Author:Naved Abdali

“Individual investors have significant advantages over professional money managers. Retail investors, like you and I, have nobody to report. We have no benchmark to beat and have no fear of capital flight. There are no quarter and year ends, and performance is not linked to calendars.”

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Author:Naved Abdali

“Capital withdrawals by investors can torpedo investment strategies of money managers at the worst possible time.”

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Author:Naved Abdali

“Gold, paintings, or bitcoin are all examples of buying a bigger-idiot type of asset. You can be lucky and find a bigger idiot most of the time, but if you consistently play the same game, once in a while you will be the biggest idiot. You will find yourself holding the bag all the way down to market bottoms.”

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Author:Naved Abdali

“In a bubble, people demonstrate some sort of cult-like behavior. They defend their positions, not by economic logic, but by force. They do this by calling those who disagree with them dirty, and mocking people who give them prudent advice.”

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Author:Naved Abdali

“It is always better to avoid hyped stocks and desire to double your money in no time.”

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Author:Naved Abdali

“In a rapidly rising market, the stretch of prices between two points of time is amplified, then so is the general public’s behavior towards prices.”

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Author:Naved Abdali

“Analyzing prices is not wrong. However, picking inflated prices as your only source of information is terrible.”

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Author:Naved Abdali

“Trading is buying and selling to exploit a change in the price. Investing is acquiring assets for economic reasons.”

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Author:Naved Abdali

“Most active investors fail to realize that they are part of the crowd themselves. They are trying to beat the crowd while being the crowd.”

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Author:Naved Abdali

“Be realistic about potential market returns, and be aware of possible risks.”

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Author:Naved Abdali

“The more investors do active trading, the more it makes sense to do passive investing.”

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Author:Naved Abdali

“When you buy a stock, you buy a piece of business, not a quote from a broker. As long as the company is doing good, your investment is safe.”

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Author:Naved Abdali

“If the prices were the motivation for buying, all future behavior and decisions would be based on price action.”

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Author:Naved Abdali

“Investments are not a lottery; if it feels like the lottery, stay away from it.”

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Author:Naved Abdali

“Somehow, we believe that we have a better chance of winning a game of probabilities, totally disregarding that everybody who is playing the game has the same possibility of winning.”

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Author:Naved Abdali

“Investing without a clear understanding of associated risk is like a child is playing with fire. Risk assets are called risk assets for a reason.”

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Author:Naved Abdali

“The outcome of an investment does not make it right or wrong.”

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Author:Naved Abdali

“Trading is not only a zero-sum game but an aggregate negative after deducting the trading cost and research expenses. Somebody’s gain is somebody’s loss, so the professional traders win the game because they have significant advantages over retail traders.”

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Author:Naved Abdali

“Short-term price fluctuation is not the real risk. It is an opportunity.”

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Author:Naved Abdali

“If you have a leveraged position, make sure nobody can take it away.”

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Author:Naved Abdali

“People like to risk pennies to win dollars.”

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Author:Naved Abdali

“An investment business has certain risks, and your job as an investor is not to eliminate all risks but to manage and minimize them.”

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Author:Naved Abdali

“The perceived risk and actual risk are two different things.”

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Author:Naved Abdali

“Human behavior and information bias play a huge role in transaction prices. It creates short-term opportunities that can be exploited.”

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Author:Naved Abdali

“If you are wearing yellow goggles, every blue thing will appear green to you. It is your perception, and it is your reality.”

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Author:Naved Abdali

“Identical information can lead to opposite conclusions based on relative perceptions of its receivers.”

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Author:Naved Abdali

“Humans are not machines. They analyze information through the lenses of their experience, knowledge, and cognitive biases. All of it makes their perception, their unique viewpoint.”

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Author:Naved Abdali

“The success of an investment is all about its execution and is not about its outcome.”

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Author:Naved Abdali

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