Louis' Look: Don't Confuse Smarts With A Bull Market

Louis Sykes
January 11, 2021

From the desk of Louis Sykes @haumicharts

I'm very new to this whole thing.

I only began trading, charting, and researching just a few short years ago - so it's only natural I become victim to some rookie mistakes.

Seeing my trading account up by a decent margin has given me this attitude that I'm some wonder kid, and that I've somehow cracked the puzzle only being a teenager.

But this couldn't be further from the truth.

If this rally has got you thinking you're a superstar, consider that 87%, a near-record high, of the Russell 3000 have outperformed the broader market in the last 3 months. That's right, 87%.

Assuming you've held stocks over this period, statistically speaking, it has actually been more difficult to underperform the S&P 500 than it has been to outperform.

Digging through the entire Russell 3000 this weekend, it becomes immediately apparent that all major offensive sectors are not only making new highs but are showing great relative strength. Whether you're buying Engineering stocks (which there's plenty of multi-decade breakouts), Banks, Medical Providers, or Software, there's no shortage of opportunity out there.

Leadership is wide and broad.

So I think the real intelligence involved in bull markets isn't just participating, but finding winners for your timeframe, managing risk, filtering out noise and opinions, and sticking with the trend.

The first is easy, but the second requires true intelligence.

As a rookie trader, I'd love to hear people's thoughts on this!

Louis

Filed Under