Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Facebook: Postmortem for a Bear With Psychological Problems


Facebook reported better-than-expected earnings after the close yesterday.

So why did I pass up easy money to swing for a homer on the short side?

Because I wanted to hit a big home run instead of going for a high-probability single. In fact, as the clock ticked down to 4:00 p.m yesterday., I was strongly considering buying some Facebook calls to turn my position into a straddle. I'm not exaggerating this at all. I had buy orders entered literally at 3:59:45 p.m., but I failed to pull the trigger.

But no, I wanted to be a big boy swinging for the fences instead of the single.

And as we all know now, that high-probability single turned out to be a grand slam.

Compounding my frustration is the fact that throughout 2012, my most consistently profitable short-term trades have come from speculating on underreactions or overreactions to earnings reports on momentum stocks!

Now, I've always felt that this type of public mea culpa was slightly self-aggrandizing, as if to say, "Ooh! Look at how modest I am!"

However, there are lessons to be learned here.

Know thyself. Do your best to monitor your emotions, so you can get some sense of when you're crossing over to a land of irrationality, and counteract it.

And in terms of actual trading, never pass up easy money in the chase for big money, because the easy trades are few and far between.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos