Why Is It Always About What You’re Buying?
- Posted by JC Parets
- on December 6th, 2013
This is an interesting question that I don’t really have an answer to. Whenever I’m in the media doing interviews, the conversation usually revolves around What do you like here? or What are you buying? Even when I talk to my buddies in the business that manage a fund like me or an RIA, it’s always, What do you like here J? Cocktail parties, Investor conferences, phone conversations with clients, same thing: What are you buying?
Rarely does the conversation revolve around what we’re “selling”. Why is that? Are we just built as humans and investors to focus on using investing capital to make purchases? What about investments or trades that we’re already in? Why doesn’t anyone ask where and when these positions will be sold? Real Estate, Stocks, Bonds, etc.
Take a look at most peoples streams on Stocktwits and Twitter: I’m buying this, I bought this, I like that. Never do I see, hey I’m selling this, whether to close out a position or sell short. And I don’t mean some of the awesome follows on the stream that post their entries and exits for all to see – those guys are great and not included in this conversation. I’m talking about just general market punditry on the tv, print, social, etc.
There are two sides of a trade or any investment right? When you buy and when you sell. And it doesn’t even have to be in that order. A lot of times we sell first and buy it back (hopefully lower). This is a two way market isn’t it? Stocks, bonds, commodities, currencies, they go both up and down right? So in theory shouldn’t the conversation be split exactly 50/50 between what I’m buying and what I’m selling? I see it more like 90/10 buy to sell, maybe even higher than that.
Is it because 401k’s are long only? But you can make adjustments and sell the stock mutual funds can’t you? Is it because sellers are the “bad guys”? Is it because the stock market has done so well this year? I don’t think this “what are you buying” phenomenon is anything new. This has always been the case.
I don’t really have an answer to this question. But as you guys know, sometimes I’ll just think out loud and maybe someone reads it and has something to add or counter…
Am I crazy? Or am I bringing up a good point? Maybe a combination of the two?
So as to not be hypocritical, here’s what I sold today:
Natgas after reaching it’s price objective: the 161.8% Fibonacci Extension of the Fall consolidation
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J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
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