If you aren't a believer of the motto of my blog by now then you'll never be. Who would have believed 3 years ago that the SPX would rally over 110% from it's low in March 2009 and not too far away from making an ALL TIME HIGH? I'll telll you who....absolutely nobody, not even the most bullish person you could find on the planet. So far this year Mr. Market has made even the bulls look foolish since they too have been calling for correction since Janurary.
I was going to discuss in detail about how utterly asinine it is for people to have either missed out or lost money during a 3 year, 110%+ bull market and how the Schiffs, the Prechters, the Hussmans and the rest of the popular gurus du jour have zero credibility for being the broken clock permabears that they are but why bother? Why should I give a shit about what other people are doing anyways? Let them burn. I should be focusing more on what I'm doing and the opportunities that are out there to make money. It's just that sometimes I feel the need to vent when I see pundits who have been nothing short of atrocious, refuse to acknowledge how wrong they have been. Instead, as the market makes new highs they just keep digging in their heels, wringing their fist saying "just you wait and see!". You know what? They are wrong no matter what the market does at this point. Anyone who misses or even worse, loses money during a multi-year bull market of 110% has ZERO credibility and if you're still following and worshiping the same people who have lead you astray it means you're delusional just they are and you probably lost money too. Snap out of it! I'm not saying you should never be bearish again....just find another way....find a way to be bearish when being bearish is the correct thing to be. I think a lot of people out there need pearmabear detox.
Perma-bears aside, what do you think about all the people that are day/swing trader nowadays? I turn on CNBC or Bloomberg, so many TV ads are catering to the crowd that has turned into "trader". Obviously we have a huge population the retail trading community that are trading and not investing. Livermore said big money are made by sitting but it seems buy and hold is dead. Signs of time eh that even after the massive equity run we've had, fear is still elevated that many people are still afraid of holding anything over overnight or the weekend.
ReplyDeleteI keep an eye on stocktwits and specifically Apple. You can see all the idiots screaming short Apple when it is down just $5 or 10. But come on this stock just went from $375 to $600 in 6 months. Down $10 is not that big of a deal right. Just kills me these guys.
most of the typical retail crowd don't believe in buy and hold anymore after getting burned by one or both of the bear markets last decade. As a result they resorted to "trading" thinking it's a safer way to play the market. ST trading also attracts the degenerate gambler types. The other allures of ST trading is that it offers you instant gratification and the ability to make lots of money by capturing all the little ups and downs. Unfortunatley, the typical day/swing trader loses in the long run. These people are so naive to believe that things like fib retracements, fan lines, stochastics and all the other voodoo indicators are going to give them an edge. The market is simply too random in the ST. I'm sure there are a handful of daytraders out there who would object to this and are successful but they are by far in the tiny minority that make money and who's to say that they just happened to be very luck. If you get 1000 people to flip a coin 100 times you'll probably get a handful of people who managed to get heads 80%+ of the time. Does that make them a heads specialist?
DeletePlaying the bigger trends is the way to go in my book. You take away the pure "random gambling" aspect of the game. It's always a gamble when you take a position, make no mistake about that, but by getting an understanding of the fundamentals and the "story" of a stock/sector and getting in early before the herd does, you put the odds in your favor. And it doesn't mean you buy and hold forever. My average holding period has been 6-12 months....it all depends on the situation. I would consider holding a position for years if I believed I got in early on a secular boom of a particular sector or company. At times I felt the need to cut and run early because I was too concerned about negative macro conditions, but looking back I realize now the better move would have been to keep the position and hedge away the macro risk.