Archive for February, 2012

How much time does it take to be a Cognitive Investor? (part one)

I have heard many investors lament, “I don’t have time to invest my money intelligently.”  Inherent in this statement is an assumption: successful investing requires a large amount of time.  They think it requires time to keep current with the latest market action, time to analyze companies, time to investigate various investment techniques, and time to learn about investing.

The truth is that is doesn’t take nearly as much time as one might assume, as long as the time is spent effectively.  Vast amounts of time are wasted by multitudes of investors who attempt to do the impossible.  They try to discern the future direction for various markets and securities or seek out someone who has a clear crystal ball.  They carefully listen to bullish and bearish arguments about the short-term future market moves and assess which viewpoint has more validity.  They continually seek out more data and opinions to clarify the situation.  This is a fruitless task.  No matter what the situation, there will always be a roughly equal number of plausible arguments about markets going in one direction or its opposite.  Read the rest of this entry »

Leave a comment

What are the chances that a limit order will be filled?

How far from the previous day’s market closing price? Buy order   (below the previous day’s closing price) Sell order (above the previous day’s closing price)
0% (at the closing price) 97% 98%
0.25% 94% 97%
0.50% 90% 95%
1.0% 81% 92%
2.0% 68% 81%
3.0% 58% 69%
4.0% 50% 57%
5.0% 42% 45%
6.0% 35% 35%
10.0% 18% 11%
15.0% 9% 3%
20.0% 5% 1%

Read the rest of this entry »

Leave a comment