Thursday, August 25, 2016

It's Not Necessary to Understand Everything

Look deep into nature, and then you
will understand everything better.
Albert Einstein

Time is one of those things none of us can create. Achievers invariably manage to be time misers. They extract the essence from a situation, take out what they need, and do not dwell on the rest. In the markets, it is not necessary to be able to understand every aspect of a company's financial statement, or to understand every aspect of economic prospects to trade the markets. It is also not necessary to understand every technical indicator. There is a balance between understanding everything and picking what you need to know.  

Many successful people live by a very useful belief. They do not believe they have to know everything about something in order to use it. They know how to use what's essential without feeling a need to get bogged down in every detail. A very simple
example: I am sure all of you own a TV and a remote control device. How many know exactly how they work? What you do know is how to use it. Simply press the power button and the TV is on, press the channel button and it changes channels. It is not necessary to know the inner workings in order to use it. 

In order to effectively use all that you are in this life, you should discover that there is a balance between use and knowledge.

"You can spend all your time studying the roots, or you can learn to pick the fruit". - Anthony Robbins.
There were probably plenty of scientists and engineers at major universities who knew more about computer circuitry than Steve Jobs and Steve Wozniak (founders of Apple Computer), but they were so effective at using what they had.


If you follow the markets every day, in time you will become proficient at extracting the information you need to make a decision. Whether it is looking through hundreds of charts, or the use of market scans looking for stocks fitting your personal criteria, or breaking down the marketplace into sectors and groups to determine what's hot and what's not. As you gain experience you will become very proficient at extracting the information you require. Then merely include these stocks, sectors, or groups you have found into a watch list where you will keep extensive notes on such things as: buy point, sell point, and your perceived risk and potential gain.