Educational Articles

This page contains a selection of educational articles I have written on a wide range of investment topics and one by Dr Alexander Elder.

Additional educational articles written by Michael Kemp may be found on the Michael Kemp Articles page on the Free Resources menu.

All articles are in PDF files. Articles are listed by title in alphabetical order by default, but this may be switched so the most recent are at the top.

Order articles alphabetically or by creation date, newest first.

Interview with Colin Nicholson
Closing Price Reversal
Watch out for it
Trending, Inside and Outside Bars
The Trend is Your Friend
Analysing Bar Charts
Watch the position of the closing price
Finding Winning Stocks
Dow Theory - Trend Endings
How to Get on Board a Good Uptrend
Finding the Right Trend
What to Look for in a Stock
It is important to get the picture right
Bubbles - How they Develop and Burst
Rights Issues and Share Purchase Plans
What they are and discussion of the pros and cons
Analysis Methods - Technical Analysis
The third part of the Mini Course
Analysis Methods - Fundamental Analysis
The second part of the Mini Course
Analysis Methods - An Introduction
The first in a three-part series of articles
How the Mighty Fall
Summary of the key points in Jim Collins' book of that name
Hindsight and Investing
Discusses what hindsight is and how it can trip us up in investing
Learning the Investment Game
How to avoid being overly confident when investing
Probability and Misleading Cues
Discusses why it is best to stick with the probabilities
Contrary Thinking - Why Sceptics Win
Discusses one of the oldest and most powerful ideas about how we should think as investors
Creating an Investment Plan
Discusses what should be in an investment plan and why
Availability Traps in Investing
Discusses one of the most common traps - how not seeing the whole picture leads to mistakes
Anchors - Don't be Caught by One
Discusses the way we can be fooled by anchoring
Taking a Loss - Why it is Difficult
Discusses the most common fault in investing - the sunk cost bias
Improve Your Decision-Making Skills
Describes the ideal way to make decisions and then what should be done in the real world
Improve Your Investment Decisions
Describes ways to think that lead to better investment decision-making
Charting a Course to Sell Shares
How to use the concept of trend to take profits or cut losses
Fundamental or Technical Analysis?
The two main types of analysis; when and how to use them
Investing Successfully
Defines investing and how to increase the chances of success
Capital Preservation Using Stops
Discusses the nature of stops and how they are used to keep capital safe in the market
Prediction and an Investment Plan
Discusses the futility of prediction and what to do instead
Bar Chart Basics
Explains the components of a bar chart and how bar charts describe the formation of prices
Avoid the Self-Destructive Investment
How to use position sizing and stop-losses to manage risk
Dow Theory - The Basic Ideas
Explanation of the key iseas in Dow Theory
Overcoming Animal Instinct
How the way we think influences our investing performance
Evaluating Computerised Trading Systems
Discusses what they are and how to assess them
Full Time Trading - What is Involved?
Discusses the realities of trading and possible returns
Become a More Confident Investor
Some thoughts on the journey from beginner to successful investor
Technical Analysis
What it is and why use it
Investing Guidelines
Timeless guidelines for selecting companies to invest in
Annual General Meetings
Thoughts on why and how you should participate
Finding Safe Stocks Likely to Outperform
Discusses some key qualities to look for when selecting stocks to buy
Contrary Thinking
Discussion of one of the most powerful habits great investors practice
2016: Risks and Opportunities in the Stock Market
Text of an address to the Australian Shareholders Association
Bull Market Lessons
How bull markets start, develop and end. What to watch for.
Four Common Errors and Biases
Discusses four cognitive biases - systematic deviations from rational judgement - that we all fall into
Seven Deadly Sins
Why emotions make us poor investors
Simple Answers to Complex Questions
Discusses a better approach than trying to predict the markets
Overconfidence Trap
Discusses why we tend to be overconfident, what it means in investing and how to counter it
Short Selling Australian Stocks
An explanation of what it is and how it may be done
Chairman Buffett - Some Thoughts
Insights into the way Warren Buffett thinks
Many Roads Lead to Rome
Discussion of three ways in which we do not always see all the investment options open to us
Corrections in Bull Markets
Discussion of how to deal with them
Inconvenient Truth
Research proving that Fibonacci and Gann retracements are highly questionable
Traps in Changing Address and Banking Details
Be very careful - also when travelling - these are the traps
Will We Ever Learn?
Discussion of the two fundamental principles of investing, such that we should never, ever forget
KISS of Death
The key questions to ask before buying a stock
Dividend Yields - Whether to Gross them Up?
Discussion of how franking credits affect dividend yields
Buying Stocks - Making the Buying Decision
Discussion of the strategies to be considered when buying into an established bull market
Charting - Can it Predict the Future?
Discussion of why this is the wrong question and what is the right question that good investors ask
Selling a Stock - When and Why
Discussion of how the decision to sell is far more than just having a stop-loss
Turn in Crude Oil
By Dr Alexander Elder April 2015
Coppock - Wisdom from Edwin Coppock
Summary of the ideas of Edwin Coppock from his paper and a description of how to calculate the Coppock indicator
Hedge Funds - Some Cautions
Discussion of hedge funds and what to be aware of
Position Size and Diversification
Discussion of two key tactics aimed at preservation of capital
Timing the Market
Discussion of buy and hold versus timing the market
Breakouts Stops and Chart Patterns
Discusses their use in investing
Dealing with Difficult Times
General discussion providing an historical perspective and the futility of forecasting
Discipline and Investing
Discussion of how to become a better investor through a disciplined approach
How to Win or Lose in the Stock Market
Wisdom on how to win and the best ways to lose
Getting Started in Investing
Thoughts on how to pull the trigger on that first investment
Trading Psychology
Why the way we think when we make decisions is more important than simple trading rules
Investing and Reality
Discusses how by aligning ourselves to reality improves our investing
Investing - Understanding its True Nature
Discusses my early 2008 losses in the context of what investing is really about
Stockbrokers - More than One?
Discussion of the need for more than one boker in case one fails
Thinking - Some Common Traps
Discusses some very common errors we all make in thinking
Asia - A View of the Future
Notes from a comprehensive report on the future in Asia
Investing: Twelve Key Lessons
The twelve most important thinks I have learned over 50 years investing
Travelling - Managing a Portfolio
Discussion of the pros and cons of various ways to manage a portfolio when travelling
Dealing with Losses
How elite performers deal with losses and how to apply it to investing
Decision-Making: The Last Fronier in Investing Skills
After we have learned analysis and money mamnagement, we need decision-making skills to become a good investor
Exchange Traded Funds (ETFs)
What they are and some warnings/cautions
Forecasting and Prediction
Discusses the types of forecasters and how to treat their predictions
Losses - Can You TakeThem?
Discussion of how to deal with losses in investing
Why we tend to see patterns in random data and how to counter it
Takeovers - Do Investors Profit?
Discussion of when takeovers may be beneficial for investors, and when they are not
Contracts for Difference (CFDs)
Explains what they are and outlines some of the riskd involved
How Crazy is a No-Stock Portfolio?
Difference in returns from stocks and bonds and what it means over time
Premature Closure - Have we done enough
Explanation of premature closure and how it can be avoided in investment decision making
Blind Faith - Wilful Blindness
Discusses wilful blindness, how it impacts on investment decisions and how to avoid it
Dividend Reinvestment Plans
Discussion of the pros and cons involved in DRPs
Margin Loans for Investing
Discussion of how marging loans work and the risks involved
Pyramiding - Commonly Misunderstood
Explanation of pyramiding and why simply phasing into a stock is not pyramiding
Coppock Indicator - How to Catch a Bull
How to calculate and interpret the Coppock indicator
Some thoughts on multitasking by a sceptic
Sharpen Our Investment Decisions
Discussion of ways to improve investment decision-making
Intelligence - Does it Matter in Investing?
Discusses how important IQ is for investment success
Intuition - Good or Bad in Investing?
Looks at Daniel Kahneman's reserach
Knowledge - Too Little is Dangerous in Investing
Discussion of learning investment skills and overconfidence
Never Accept Information Blindly?
Why ratios and financial data can vary between sources
Signs of Trouble - This Stock Will Self-Destruct
How to avoid corporate failures
Stages in Learning to be a Good Investor
Simple explanation of the stages we need to pass through from beginner to experienced investor
Steve Jobs - What was Special about him?
Review or an assessment of Steve Jobs
Stops - What are They?
A discussion of the logic behind stop-loss levels
Addition of Substantial Funds to a Portfolio
What to do if you have significant new capital to employ
Ideas from John Sevior
Wisdom from one of Australia's great investors
Know Yourself
Wisdom from David Fisher and thoughs of mine
No Dumb Questions
Wisdom concerning how to analyse a stock
Rates of Return
Discussion of Return on Equity and Return on Assets
Discussion of an Email from a Former Student
Covers many areas of basic wisdom about trading
Dividend Imputaion (Franking Credits)
Understanding how all tax payers benefit equally from franking credits
Introduction to Indicators
Explains the general types of indicators used in technical analysis
Ratio Analysis - Know What You Are Looking At
Discussion of how and why financial ratios differ between published sources
Target Return for My Portfolio
A discussion of the need to have a target return in our investment plan
Thoughts Approaching the Top of a Bull Market
Conflation of two articles written near the top of the Tech and Internet boom
Backdoor Listings
Explains backdoor listings on the ASX
Position Sizing
Understanding the role of position sizing in risk management
What Bubble?
Shows how to read a chart properly to detect bubbles
Comparing Stock Markets
Explores the pitfalls in comparisons
Ex-Dividend Dates
Explains Ex-Dividend, Payment and Record dates on the ASX
Knowledge for Investing
What I have found is necessary and useful
ASX Ticker Codes
Explanation of the structure of ASX ticker codes
Investing, Trading and Gambling
How to tell the difference
Shopping in the Stockmarket
Why we act differently in the stockmarket to the supermarket
Combining Share Selection Strategies
Address given at an Australian Shareholders Association Conference
Decade of Debt
How the world might recover from high debt levels
Does the ASX Always Follow the US?
A look at how often our market follows the US market up or down
High Frequency Trading
What it is and what it means for investors
Investment I Did Not Make
Shows an example where analysis led to a decision not to buy
Investment Wisdom from The Super Analysts by Andrew Leeming
My extensive notes from this book
Macro View of the Main Overseas Stock Markets
A thesis about the way stock market unfold after debt fuelled booms
Selecting Stocks in Difficult Markets
An explanation with case study of how I select stocks
Take Profits or Wait for the Stop-Loss?
Discussion of one of the most common problems in investing