Cutting Losses

Itzhak Ben-David is a prominent economist in the United States. In 2012, he co-authored a ground-breaking paper, which was titled “Are Investors Really Reluctant to Realize their Losses? Trading responses to past returns and the disposition effect” (Ben-David & Hirshleifer, 2012). As the title suggests, it studies how retail investors to enter and exit as their positions develop.

The Right Moment

The Second Punic War (218 BC – 201 BC) was a major conflict in Europe from 218 to 201 BC. It was fought between Carthage and the Roman Republic, the two superpowers of that time. At the beginning of the war, Carthage had the advantage because their general, Hannibal, was a military genius. It began when Hannibal surprised the enemy by crossing of the Alps and attacked the Romans where he was the least expected. He crushed the Roman armies in the Battle of the Trebia and the ambush at Trasimene. 

The Price Cycle

Richard Wyckoff is one of the most famous traders and analysts in the stock market. He invented many ground-breaking concepts in technical analysis which still remain valid today. One of his greatest contributions is his analysis in the different stages of the market. According to his work (e.g. Wyckoff, 1931), the share price of a company usually goes through four stages. Each stage has different characteristics in terms of fundamental and technical behaviours, and should be handled differently as a result.

Seeing the Unseen

Abraham Wald was a Jewish mathematician in the early twentieth century who was born in Austria-Hungary (now Romania). He later immigrated to the United States and started a new life there. One of his greatest contributions to the United States was helping the U.S. military to design their planes. During the Second World War, the B-29 bombers of the Allied were being shot down from time to time. They would like to fortify their aircraft, but if they did, it would sacrifice the mobility of the planes by adding weight to them. Therefore, the additional armour must be added to only the most fatal areas so that they could keep the increase in weight to a minimum.