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Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades by Stephen Morris

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WHY MANAGED FUNDS CAN BE “DILUTIONAL”

Many fund managers change their investment strategy too often, diluting shareholders' gains over time. In his book, What Works on Wall Street, James P. O'Shaughnessy wrote the following:

The only way to beat the market over the long term is to use sensible investment strategies consistently. Eighty percent of the mutual funds covered by Morningstar fail to beat the S&P 500 because their managers lack the discipline to stick with one strategy through thick and thin. This lack of discipline devastates long-term performance.

You need a clear plan of action for your selected time frame—in rising, falling, or sideways markets. The absence of such a plan means losing time and money.

It took me about a decade to learn these lessons deeply and emotionally and not only intellectually. Research generated confidence, which led to consistency, which in turn boosted my performance.

Throughout this book, I will share with you my tools: the right strategies at the right time. Using the right methods and practicing strict discipline will help you improve your trading skills to a point where lofty goals can be reached.

I have won several diplomas since being invited to become a Spiker in the SpikeTrade group. I was awarded first place in the trading competition for the first, second, third, and fourth quarters of 2010, breaking a SpikeTrade record. My techniques and strategies, polished through constant practice, have been consistently effective at all stages ...

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