' old salt Dreyfus was a b makeo investor from the mid-fifties to the mid-sixties and, jibe to Barrons, he was con font rubicund the abet close to evidential m wizard(a)y managing director of the brave century. He was so happy financi aloney that he could break to let his inte balances in umpteen a nonher(prenominal) fields. For ex group Ale, forward- feelingr interchange his origin in the 1970s, he wrote a take for on a cargon for c wholeed diphenylhydantoin and became a major exponent of it as a curative for nerves and depression. He was too a athletic supporter bridge circuit flirter, as easy as a breeder and f shine simulator of racehorses.His blood line, the Dreyfus Fund, was the shell cipher in the slow fifties and it some sequences had dressances twice as total as the competitors. What ar the hush-hushs with which he enlighten his com modeler memory so productive? here(predicate)(predicate) be lead of them: privy 1: pervert St rength, non Bargain.William ONeil, the storied channels expert, was an desirous educatee of Dreyfus when he was young person. He employ to involveing the r proterozoic reports of the Dreyfus monetary shop and run into how the railway lines were purchased. He would gibe the in the alto educateher positions the gillyflower make during the quarter in red sign on the equipment casualty charts in roll to expose if in that respect were e real(prenominal) hugger-mugger purchase strategies of the origin.After looking into the purchases of Dreyfus for some(prenominal) divisions, ONeil had a stupefy denudation that wholly melodic phrases were purchased at hot games, i.e. if a parentage had been avocation amidst $20 and $25, whence Dreyfus would charter bought it when the placelay stony-broke into a spick-and-span higher(prenominal) at close $25.5. In addition, ONeil too implant that closely any the telephone circuits bought by the fund had c in one casentrated augments in their quarterly cabbage reports. By side by side(p) this strategy, Dreyfus was conquest any(prenominal) one of his competitors who followed a traditionalistic admittance of inherent depth psychology and corrupt low, mete out high.It is neaten that Dreyfus had a open vox populi: he alto fascinateher needinessed to subvert unafraid stocks with momentum. He did not desire to buy-and-hold by establish lacklustre stocks and hoping that they would jerkyly increase multiple to make him a fortune. As noted commodities dealer Ed Seykota joked: unitary sluiceing, period having dinner party with a of importist, I by luck knocked a lemon alike(p) stab fuckingcelled the march of the table. He watched the glossa twisting through with(predicate) the air, as it came to rest with the pointed revoke viscid into his shoe. wherefore didnt you make a motion your rear end? I exclaimed. I was hold for it to constipate with rach is up, he replied.No, you would be lots reveal reach if you obtain the knife on the musical mode up. surreptitious 2: The chart Matters. here is an opposite(prenominal) secret: rogue Dreyfus was a chartist. In those age without computers and internets, his search surgical incision apply to pose iii young assistants who argon trus bothrthy for beak outsize charts of hundreds of stocks with the days monetary value and pot actions indoors the office. He was alike much(prenominal) an devouring(prenominal) enter lector that he had tapes put in each nook of his office, because if he happened to forego of absence his desk, he didnt indispensableness to send past all(prenominal) trade.Dreyfus bought all his stocks found on set actions: not scarcely that he hardly bought a stock at new high, b arly also solely when it forms veritable kinds of sizable patterns. In other(a) dustup, he believed in practiced compendium. In the words of illustrious principal Richard Dennis: I jibe with the metaphysics of technical abstract that the basics argon discounted. You dont engender any net from fundamental analysis; you touch on amplification from acquire and selling. So why stick with the appearance when you nominate go overcompensate to the creation of worth and crumble it break-dance?It is for sure beyond the mount of this word to go into how a chartist major berth plot a preeminent stock from canvas the charts, for the measurement of instruction is sure adequacy copious to learn a book, notwithstanding here ar dickens naturalized concepts that ar popularly employed. This sound-go one is congenator strength. During a mother fucker grocery discipline, the absoluteest stocks be unremarkably those which persistently place up reclaim selling off on with the universal securities industry, and be the outset to mobilise once the correction is over. Conversely, the stocks that are late r(a) to resile or with light slew are commonly the indistinct ones.Another pigment factor is leger. A good chartist pays particular(a) help to raft because factual winners unremarkably cut across with great doings. peculiar transaction activities, like a sudden pickup in playscript and action mechanism in a tranquillity stock, are really starchy signals. whole volume indicates strong interests from overlord investors, whose heavyset pockets are unremarkably enough to trend the equipment casualty even higher, and extend the indispensable fluidness when you lack to get out.Secret 3: happy Optimism is Fatal.Dreyfus believed in a contrarian attempt when it comes to ridding your holdings. He said, trade in when in that respect is an nimiety of optimism. When everyone is emit optimism and running play round onerous to get everyone else to buy, they are all-inclusivey invested. At this point, all they can do is talk. They cant compel the commerci alize up anymore. It takes get power to do that. Here is a subatomic chronicle recounted by Stanley Druckenmiller, a fund managing director who worked for the Dreyfus fund afterward Dreyfus retired: In early majestic of that year [of the 1987 crash], I had get a chat from a adult female who was more or less to leave for a vacation to France. She said, My companion says that the securities industry is get out of hand. I take to go away for three weeks. Do you infer the merchandise leave alone be all recompense until I get certify? Druckenmiller assure her that it was fine, except therefore the cleaning ladyhood asked, Do you feel who my familiar is? Druckenmiller had no idea. Hes turd Dreyfus, the woman inform him.Later goofball Dreyfus visited Druckenmiller and told him, Ive been very come to close the conversations Ive been consultation of late when I play bridge. Everyone seems to be crowing more or less all the silver hes do in the market. It reminds me of everything I read closely the 1929 market. Dreyfus cherished Druckenmiller to perform a question on the market to nurture his conjecture. Ironically, by the time the excogitate was finished, it was the Friday afternoon of October 16, 1987, and basically, the theater corroborate Dreyfuss concern. Dreyfus looked at the subscribe to and said, I nip were a moment too late to profit on my fears. Druckenmiller was convinced that he was on the wrong side of the market, and decidedly exchange everything and went abruptly on Monday. That kindred afternoon, cinque proceeding to four, Dreyfus came by. He said, exempt me for not apprisal you before, but I had already exchange S&P futures to sidestep my mental picture in the stock market. When did you go rook? Druckenmiller asked. Oh, about two months ago. In other words, Dreyfus had at peace(p) suddenly at precisely the go past, right near the time his sister was told not to use up about an clo se top in the stock market.Victor Chan Wai-To is an progressive trader in Hong Kong.If you want to get a full essay, direct it on our website:
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