The Traders Journal

Learning From Legends: Gerald Loeb's Timeless Investing Wisdom Stands The Test Of Time

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BlogI’m sure you’ve heard the expression, “the more things change, the more they stay the same.”  Gerald Loeb used this phrase frequently.  I’ve always had great respect for Mr. Loeb.  True, he was an extraordinary investor and a best-selling author.  But what I most respected him for was his business acumen.  As one of the founding partners of E.F. Hutton, he was often quoted preaching to investors about the need to approach investing as a business and with a business mind.

Early on, I took his advice to heart.  From the very beginning, I always made certain that I organized my investing activities in a manner that yielded timely investment reports and minimized taxes.  I also sought out the best professional accounting, legal, tax and estate planning advice because this is what Gerald Loeb advocated.

Personally, his advice has been validated over the decades.  Having known a large number of traders, I’ve observed that the most profitable ones have seldom been the smartest or boldest.  They are usually organized individuals who are willing to focus on the small details.  They are those people who are comfortable with routines and have the discipline to follow them.  I’ve often noticed that they are unpretentious as well – even humble at times. 

If you stop and think about this, being free from pride and willing to be subservient to something like the market – which is so much bigger than any of us – allows one to remain open to listening to the market and letting the market itself show us the way.  This same mode of openness is a common denominator in the management styles of many of America’s greatest business models.  Gerald Loeb simply challenged the broader spectrum of stock market enthusiasts – from traders to hobbyist investors – to adopt this business mindset in their speculative activities.

With a sincere and abiding respect for Loeb’s many contributions to the investing arena, I also want to recognize just a few of my favorite market wisdoms from the “most quoted man on Wall Street” according to Forbes magazine.

  • “You don’t need analysts in a bull market, and you don’t want them in a bear market.”
  • “The most important single factor shaping security markets is public psychology.”
  • “A willingness and ability to hold funds un-invested while awaiting the real opportunities is a key to success in the battle for investment survival.”
  • “There is a saying, “a picture is worth a thousand words.”  One might paraphrase this by saying a profit is worth more than endless alibis or explanations…prices and trends are really the best and simplest “indicators” you can find.”
  • “Accepting losses is the most important single investment device to insure safety of capital.”

In closing, I remind you that the market is notorious for its cyclical emotional discord and all its event-based intrigue.  But much like Gerald Loeb, I too challenge you to continue to trade with a spirit of tenacity, organization, business acumen and always a sense of controlled risk.

 

Trade well; trade with discipline!
Gatis Roze, MBA, CMT

StockMarketMastery.com

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Gatis Roze
About the author: , MBA, CMT, is a veteran full-time stock market investor who has traded his own account since 1989 unburdened by the distraction of clients. He holds an MBA from the Stanford Graduate School of Business, is a past president of the Technical Securities Analysts Association (TSAA), and is a Chartered Market Technician (CMT). After several successful entrepreneurial business ventures, Gatis retired in his early 40s to focus on investing in the financial markets. With consistent success as a stock market trader, he began teaching investments at the post-college level in 2000 and continues to do so today. Learn More
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