The post below comes courtesy of my friend Blain Reinkensmeyer who runs the very popular Stock Trading To Go blog.

To be a great trader you must be disciplined. Following a set of rules can make the difference between successful story telling versus ruminating on last week’s losses.

Jesse Livermore, one of the best traders of all time, and John Paulson, one of the best traders of the last few years, both have a set of rules they follow religiously. Their success serves as your opportunity to enhance your investment savviness.

Below are the rules of both Livermore and Paulson alongside a bit more background information on who they are (hat tip Minyanville and WSJ).

Jesse Livermore, one of the greatest

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Michael Mackenzie, Saskia Scholtes and Aline van Duyn (Financial Times): Trepidation as Fed prepares to end easing, October 29, 2009. As the Federal Reserve’s programme of buying mortgage debt edges towards $1,000 billion this week, investors are starting to worry about what happens once the central bank starts to slow down and exit from this key plank of its monetary easing policy.

• Quint Tatro (Minyanvile): Seven lessons from a legend, October 29, 2009. Jesse Livermore was wealthy and broke several times over during his tumultuous life, which ended in his suicide. His ability to make and lose millions garnered him many lessons which the trading community have enshrined over the decades since his death. Yet these lessons and

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Yesterday we detailed the different between this current economic contraction, and your usual run of the mill plain vanilla recessions. We also went over the MASSIVE consumer credit contraction that needs to occur before American households have finished de-leveraging.

Today, we’re detailing why stocks will Crash this coming fall. As you know the media is rife with folks calling the end of the recession and the beginning of a new bull market. It’s clear to me that this is a load of nonsense. Today I’ll show you why.

Because a lot of the alleged “analysis” that is backing up the bulls’ claims of a new bull market comes from technical analysis and charts, I’m presenting the below chart from David Rosenberg of Gluskin Shef. It charts today’s bear market over that of 1929-1932.

As you can see, today’s bear market is mirroring that of the ‘30s almost to perfection. Indeed, …

What the heck is going on? The Dow has just had its best weekly performance since March 2000. CNBC is full of whopping and high-fiving. The Obama administration is breathing an audible sigh of relief. And mom and pop investors all across the US are no doubt considering putting more of their savings back into the market.

Yet here at Notes we remain cautiously bearish. Why? Because it is our humble opinion that this remains a bear market rally, impressive as it is. Gluskin Sheff’s David Rosenberg says the rally lacks three key ingredients:

Leadership Quality Volume

History is littered with such bursts of euphoria. Probably the most infamous is the bear market rally of 1930. Stocks recovered strongly following the November 13, 1929 low. Wall Street became wildly confident that the worst of the crash was over. And for a time the bulls were dead on. From a low at 199 on November 13

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I wouldn’t read a lot into the action in the gold market on Friday. It was just another day off the calendar…as Ted Butler would say. The only comment I would make is that the action in the gold price feels more like a top than a bottom. Silver was a little more interesting, as it rose in price through the entire trading day, and finished virtually on its high of the day…and a new high for this move. Now the dichotomy between gold and silver is starting to show up in the price action, and not just the open interest numbers.

Speaking of open interest numbers, gold o.i. on Thursday fell 3,216 contracts to 391,144…on absolutely monstrous volume of 174,662 contracts. Silver’s decline was much more modest…only 93 contracts to 96,309…on total volume of 18,664 contracts.

The Commitment of Traders report issued yesterday, was as expected. In silver, the bullion banks

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By Guest Author: Andy Richardson

My sister went house hunting last week. She likes a Taylor Wimpey PLC new build development but the plot she would want has not been started. The site representative said that Taylor Wimpey would not start to build on that particular plot until the three existing houses have been sold. They are anticipating about 18 months. So much for green shoots in the housing market. An estate agent I spoke to the other day said how fast rents are falling in my area since so many repossessions are being rented out by the receivers instead of being sold at auction. The receiver gets paid, the mortgage company gets some income and the tenant gets a home with an affordable rent.

I had a hard look at some ‘Industrials’ over the past couple of days. CHTR is a very well managed company yet its last trading announcement was …

The market has staged a very impressive rally since the March 6th low. At that time the S&P bottomed at 666 and is now around 900. This massive rally has occurred in just two and a half months. Some talking heads in the media are now saying that this is the start of the next bull market. Many call a move of 20% or more a bull market and perhaps by that definition they are correct. However, the decline seen last year should then be called a ‘mega bear’ as the S&P went from 1576 to 666 in just 18 months.

Some market technicians like myself, that follow cycles, were looking for a rally in the market in the month of March. It is very common to see major reversals or turning points in the months of March and October. Even last March (2008), as Bear Stearns collapsed it was

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Medassets Inc. (MDAS) is a Alpharetta, Georgia provider of revenue cycle and spend management software for hospitals and other healthcare providers that is seeing strong demand for its product and for its common stock shares. Let’s look at the fundamentals of this company (the meat and bones) to see why this mutual fund demand is so strong.

The EPS of MDAS started to turn down in 2006 and that lasted until early 2008 when it finally started to turn around. For the past five quarters, EPS has been growing at 10%, 175%, 999%+, 999%+, and 0%. During the past eight quarters sales growth has been 13%, 32%, 46%, 39%, 42%, 54%, 55%, and 34%. While it is obvious that the EPS and sales are slowing in the most recent quarter, YOY EPS estimates for 2009 and 2010 still see an increase …

During the 1920's, two savvy investors who utilized technical analysis became prominent. Jesse Livermore traded the tape. Three times he made a fortune and then lost it. His life ended in a coat room of a New York hotel.On the other hand, Richard Wyckoff developed a method of technical analysis that is followed by many today. His writings (and the writings of his successors) are mandatory reading for all students of technical analysis. As a matter of fact, knowledge of the Wyckoff Method is required in the curriculum for the Chartered Market Technicians designation by the MTA (Market Technicians Association).Using Wyckoff's schematic for pattern analysis, the U.S. equity markets are very similar to the classic Wyckoff accumulation phase B.The creek is a hand-drawn line connecting the tops during the accumulation phase. At some point, price rises above the ...

Notes from the Investment Underground

Thursday, April 23, 2009

Palermo Viejo, Buenos Aires, Argentina

The greatest economic disaster in recorded history (and how to profit from it)… Your market ”script”… Lessons on guerrilla investing… Banks switch sides… The best communications company in the world… 3 sectors you should own now… Your key to “permanent wealth”… A massive glitch in the administration’s matrix… Notes subscribers beat up on your editor… 1,159% gains as stocks go bust… And more!

*** “The current administration’s economic strategy could create the greatest economic disaster in recorded history,” says Porter Stansberry in today’s DailyWealth.

Not only is the administration planning on enormous deficit spending this year, but the current plan calls for increasing deficit spending for the next decade – spending that will more than double ...