Minyans--at the end of the year, we're judged by wins minus loses. Cutting down on the latter will only help the former.
Good morning and welcome back to the conflicting ticks. When we last spoke, the Minx danced around Dubya's sabers and managed to sneak a peek on the upside. The effort was admirable and, by the time she was done, the weak longs were shaken out and the shorts got caught looking the wrong way. With the pressers guessing and the guessers pressing, the obvious question is begged: How the heck are we supposed to make money in this environment?
It's surely a strange time for the markets but you can take solace in the fact that hey-- it's not you! There are compelling reasons to be short and salient arguments to get long--what you do, and how you do it, exposes you to risk on both sides of the tape. I mean, let's forget about the fundamental, psychological and structural metrics for a moment and look purely at the technicals. Our trusty stochastics have given strong buy signals and, as they kicked in, the tape rallied right to hard resistance. One of these guides is offering a false signal and, as there are betters on both sides of the game, somebody's bound to go home unhappy.
Perhaps it's myopic to think that, if we're patient, "easy" trades will show themselves. Still, risk should never be assumed as a function of frustration. It's the age old analogy--the casino has the staying power and, as such, the odds are stacked in her favor. While that's true (to a degree), it's a cop out to use it as an excuse for losing money. YOU make the decisions, YOU pull the trigger and YOU are responsible for your actions--if you're not mandated to trade every day, DON'T. Patience and discipline will enable you to stay in the game while others stand in a circle and shoot for performance.
If you think it's hard now, wait a few years when the scarcity of money really starts to kick in. The last thing I want to see is my fellow Minyans looking back and wishing they saw now what they'll know then. If there's two words that I had to chose to tattoo in your mindset, they'd have to be "capital preservation." That's not to say there won't be bullish phases (there will be), but when the process smoothes itself out over the course of time, X plus anything will be a win. Of course, that's only my humble opinion and trust me when I tell you that I hope I'm wrong.
One step at a time. I say that a lot and I know that, as such, it potentially loses it's flavor. But think about it...one foot in front of the other--on solid ground--will enable us to move forward (albeit slowly) with a lower likelihood of tripping. It's not the most exciting existence but, hey, we've had enough excitement to last us a lifetime. When it comes to your finances, slow and steady will win the race. As John Brett, teacher extraordinaire, always told me "take care of the minutes, and the hours will take care of themselves." Tick tock, Baby, and keep your right hand up.
Good luck today.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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