Michel Pireu Columnist

From Long-Term Secrets to Short-Term Trading by Larry Williams: As a trader, the lesson is to never second-guess what value really is: it is what the market will pay. It may not be that value for long, but price is king. It is what it is. I learned long ago not to argue with what is. In 1974 I decided that the price of cattle would skyrocket so I began loading up, taking my first position at 43c a pound. I “knew ” the value of cattle; at this price it was way under value, offering a sure trade. As the price drifted to the 40c area, I bought more. After all, if 43c was cheap, 40c was even better. At 38c, where the price went next, I had a steal. Being no dummy, I stole some more, only to see the price plummet to 35c, then 30c and finally 28c — where, dear reader, I was tapped out. My resources were limited; this move cost me about $3m in less than 30 days. Two months later, the price of cattle soared to over 60c a pound. But I was not there — a sure-thing trade had set me back dearly...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now