Ferg Profile picture
20 Nov, 3 tweets, 1 min read
My mentors rules of thumb

1. Asymmetry in all positions

2. Position yourself to get lucky

3. Make it harder for the market to take money off you by spreading in into more asymmetric trades
4.Mean reversion: Excessive outperformance is usually matched by equal or greater underperformance

5. It's not the view its the application of the view that matters

6.Bull markets are born in pessimism, grow in skepticism, mature in optimism and die in euphoria-John Templeton
7. When everybody thinks alike, everyone is likely to be wrong, because no one is thinking. -Humphrey Neil

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Ferg

Ferg Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @trader_ferg

19 Nov

Charles Ellis had the idea of the "losers game"

Professional tennis is a "winners game" i.e. you win by hitting winning shots

Amateur tennis is a "loser's game" i.e. you win by not making mistakes.

Investing is a loser's game.

Avoiding making stupid mistakes is key
The 1st rule is to avoid anything that prevents you staying at the table

Always be long time & avoid margin

Rick Guerin was Buffet and Mungers equal in intelligence yet he wanted to get rich quicker & used margin

He got margin called in 73 & sold all $BRK to Buffet at bottom
2nd rule: Is to make sure the company can stay at the table.


Cash levels?

Debt levels?

When are debts maturing?

Will they be able to roll at the same terms?

Historic rate of dilution if small miner?

Read the 10Q and 10K do the work!
Read 7 tweets
17 Nov
Damn this comparison is chilling from Neil Postman

I need to read a Brave New World following reading 1984 a few months ago.

“We were keeping our eye on 1984. When the year came & the prophecy didn't, thoughtful Americans sang softly in praise of themselves.
The roots of liberal democracy had held. Wherever else the terror had happened, we at least had not been visited by Orwellian nightmares.

But we had forgotten that alongside Orwell's dark vision, there was another - slightly older, slightly less well known, equally chilling:
Aldous Huxley's Brave New World. Contrary to common belief even among the educated, Huxley and Orwell did not prophesy the same thing.

Orwell warns that we will be overcome by an externally imposed oppression.
Read 8 tweets
10 Nov

These are 10 heuristics/ideas that have served me well and I lean on them whenever considering a decision or making an investment.

Benefited hugely from the ideas and wisdom of Charlie Munger, Howard Marks, @jposhaughnessy @morganhousel and @nntaleb.
1. Incentives

“Show me the incentives and I will show you the outcome.” - Charlie Munger

Ensuring incentives are aligned positions you for better outcomes.

At the minimum know what everyone's incentives are before entering any deal/investment.
2. Asymmetry

Position for ideally large (unknown) upside and small (known) downside

"If you ‘have optionality,’ you don’t have much need for what is commonly called intelligence, knowledge, insight, skills and these complicated things that take place in our brain cells"-N Taleb
Read 11 tweets
10 Nov

I've been trying to wrap my head around how we headed up in this mess of multiple lockdowns

Don't buy the power grab(few exceptions) or incompetence arguments

Listening to @profplum99 interview @Gavekal a theory was outlined that makes a lot of sense

CYA=Cover your ass
Now CYA was always fairly prominent in democracies

Adding social media to the mix was like adding 100x leverage to a trade(makes it easy to blow yourself up)

So politicians were terrified of being held accountable for deaths

So obviously they have zero incentive to take risks
"Now that every policy choice is reviewed and debated in real-time by millions of people around the world, CYA has become all-important.

Politicians have to put policies in place to hedge against the wildest tail risks imaginable."
Read 9 tweets
5 Nov

I was digging through some notes from reading @AnnieDuke book: Thinking in Bets.

Loved this book and her podcast with @ritholtz
on Masters-in-business.

This is a key book for anyone interested in trading/investing

Here are some of my takeaways and favorite quotes.
1. How sure are you of a belief you hold if asked, “Wanna bet $1000 your belief is correct?”

Are you still 100% sure or maybe only 70%?

This helps to ensure you’re not blindly defending your belief and instead inviting skepticism and a search for the best information.
2. “Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out:

The quality of our decisions and luck.

Learning to recognize the difference between the two is what thinking in bets is all about.”
Read 17 tweets
3 Aug

Had never heard of the Princess Brides battle of wits

Mike Green @profplum99 mentions it is the basis for his twitter avatar and a reminder to ensure he's playing the game he thinks he is playing

Didn't really follow so looked up the dialogue

It's so good....
Man in Black: I challenge you to a battle of wits.

Vizzini: For the princess?  

To the death?  

I accept. 

Man in Black: Good.

Then pour the wine. 

[Vizzini pours the wine, and the Man in Black pulls out a small vial]
[He puts the goblets behind his back and, presumably, adds the poison to one of them, then sets them down in front of him]

All right. Where is the poison? The battle of wits has begun. It ends when you decide and we both drink, and find out who is right... and who is dead.
Read 14 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!