Thursday, March 4, 2010

"Tips are for waiters"

Please don't feel offended. These are not my words.

Moreover, neither you nor me depend on 'tips'.

These words were spoken by Larry Livingston, one of the world's greatest stock traders!

He was a strong opponent of acting on tips to buy or sell a particular stock.

He even pointed out on a number of occasions how trading opposite of tips can be the best way to make money!

- the "tip" provider may have his own motive behind it

- the "tip" provider may have himself got the tip from somewhere

- the "tip" provider may not be competent

- the "tip" may have "conditions apply" clause not disclosed

- if thousands and lacs are getting the same "tip" it is a sitting duck for the punters

- the "tip" may be a rumour

- a "tip" generally doesn't come with a Stop Loss, Target and Time frame

- a "tip" will never give you confidence

- a "tip" will always keep you dependent

- since you rarely know the reason behind the "tip" it is dangerous!

- the "tip" may no longer be valid!

- the "tip" which has reached you after changing many a hands is as deadly as the chinese whisper!

- the "tip" may be an orphan (nobody knowing who started it)

A "tip" however is different from a "call" from an expert who has got the credentials, a reputation and a stake!

So, tick off the "tip", take the "call".

And better still, do the "own thing"!

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