Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.
Centuries old, still relevant
Eddy Elfenbein finds a set of market rules from a book written by Jose de la Vega in 1688:
The first rule in speculation is: Never advise anyone to buy or sell shares. Where guessing correctly is a form of witchcraft, counsel cannot be put on airs.
The second rule: Accept both your profits and regrets. It is best to seize what comes to hand when it comes, and not expect that your good fortune and the favorable circumstances will last.
The third rule: Profit in the share market is goblin treasure: at one moment, it is carbuncles, the next it is coal; one moment diamonds, and the next pebbles. Sometimes, they are the tears that Aurora leaves on the sweet morning’s grass, at other times, they are just tears.
The fourth rule: He who wishes to become rich from this game must have both money and patience.
Advice from a con man
MarketWatch has a talk with Bernie Madoff from prison:
MarketWatch: You have worked with some of the most elite financial firms on Wall Street. How has it changed since before you started the Ponzi scheme?
Bernard Madoff: The individual investor is the last person that has any information. The average investor is coming up against professional financial firms, hedge funds and the professional trader, and it’s easy to be scared out of the market.
MW: You say the individual investor is facing an unfair market environment, what can be done to level the playing field?
B.M.: The SEC needs more resources to protect investors. It’s grossly undercapitalized and it doesn’t have money to hire the right people. Basically it’s a training ground, by the time people are qualified they leave and work for private firms. They didn’t catch me because the whistleblower, Harry Markopolos, was leading them down the wrong alley. He was an idiot.
The key to success
Robert Frank of CNBC discusses a survey of successful people:
Among people worth $5 million or more, more than 98 percent cited hard work as a “wealth creation factor.” More than 90 percent cited education, followed by “smart investing,” “frugality” and then “taking risk.”Slightly more than half of those surveyed cited “being at the right place at the right time” as a factor in their success — ranking it far below hard work and education.Among business owners, however, the number of self-described “lucky wealthy” is much higher: 79 percent of them cited “being at the right place at the right time” as a factor in their success. Fully 68 percent of business owners cited “luck” as a factor.