Take Care of Your Business
The thing is about the market, it's not me vs you. It's not you vs the fed, or you vs whoever the president is.
It's you vs you.
Can YOU overcome the obstacles that prevent you from profitability?
It's easy to blame the guy on TV or the sell side analyst who told you she liked the stock.
But it's you who pulled the trigger. It was you who couldn't manage risk properly.
It really has nothing to do with the TV or the economist, or even the guy at work who gave you a tip.
It comes down to you. If you lose money then it's your fault. No one else's.
And when you make money, then that was because of you too!
As investors our primary focus should be on what we're doing, the decisions we're making, and the risk management that we're implementing for ourselves.
My objectives, risk parameters and time horizon will be different than yours, different than your neighbor, or drunk uncle, and even the economist or the lady on basic cable television.
You have to determine for yourself what is YOUR time horizon. What is YOUR goal as an investor and what are YOUR risk parameters.
YOUR answers will be different than mine, and all those other types of people I mentioned earlier.
As investors we need to focus on ourselves. Investing is hard enough without having to worry about what other people are doing.
Why should it matter if some teenager is YOLOing ape NFTs or call options on TSLA?
Why is that your problem?
Why should it matter to you that someone is putting their life savings and risking their family's home on a bad trade?
You're not going to stop them. They're going to blow up no matter what you tell them.
Besides, are you going to spend every night of your life going bar to bar all over town stopping people from drinking too much?
Are you going to stand in the checkout aisle at the grocery store trying to prevent all the overweight people from buying all those sugary items?
If people want to drink themselves to death, or eat themselves to death, there's nothing you or I can do about it.
If someone wants to lose a ton of money in the market, they will. There's nothing we can do about that.
But you know what we can do?
Take care of our own shit. Make sure we make some money, but most importantly make sure we keep the money we already have.
Kendrick Lamar talks about how thankful he is that older rappers taught him, "Make sure you take care of your music and your family each and every single day".
And the same applies to us. Make sure you take care of your portfolio and your family each and every single day.
Work on your craft.
Think about it, can you even become a worse investor? Is that possible? I suppose you could I guess. But chances are, by putting in some work, finding the right mentors and working on your mental well-being, you can work on becoming a better and wiser investor.
It's hard to become a worse investor. I'm really confident about that.
Holy Trinity of Trading
3 questions need to be answered:
- What are your objectives as an investor? What are you trying to accomplish in this endeavor?
- What is your time horizon? How long do you plan to hold this position/positions?
- What is your risk tolerance? How much are you okay losing if you are incorrect in your assessment?
This is the holy trinity of trading and investing, as far as I'm concerned.
If you haven't answered all 3 of these, and more importantly haven't stuck to your answers, then I think you've already lost.
If you're spending any time at all worrying about what others are doing with their money, then I think you've already lost.
Focus on yourself. Worry about your own family.
Isn't that hard enough?
And just to be clear, we try to aggregate what other investors are doing in general, like Active Portfolio Managers, Advisors, Individual Investors, Commercial Hedgers, etc. And we do that for sentiment analysis.
But that we do as part of our regular technical analysis process. It is much different than worrying about Joe in the corner buying too many NFTs or using too much leverage.
Just because you don't understand why someone finds value in an asset that you think is ridiculous, doesn't mean that there isn't any value in that asset.
Maybe you just don't get it. Is that a possibility?
Imagine spending so much time worrying about what someone else is doing, because you're so confident that it's the wrong thing to do. And then later on it turns out that they were right all along, and it was you who was wrong!
It was you who was so busy making fun of a new asset or new community of investors to realize the amount of value in it all. Imagine the amount of money you left on the table for being a stubborn fool.
I've seen it a million times. They've been making fun of bond investors my entire career. "Rates can only go higher!". "There's support at zero for rates, sell bonds!". "Inflation is coming, it will kill bonds". I promise you, these are the things they've been telling me MY ENTIRE career. And all treasury bonds do is go up (my entire career).
About 15 years ago I used to be a gold bug. True story. But everyone wanted to buy bank stocks and Chinese technology. And then Oil & Gas stocks. And all of those came crumbling down, while Gold held in there better than anything else.
Gold was the Bitcoin of its day, believe it or not.
And of course, many of those fools have been waiting for the next great gold run ever since. And it hasn't come, of course. I'm a fool right now, for example because I've thought gold would get going over the past month and still hasn't.
My point in all of this is that no one cares what you think. I certainly don't. And the market most definitely does not.
So why should you care about what others think.
Do what you need to do.
Take care of YOUR family.
That's your responsibility.
Go get yours, and then with your free time you can go try and help others (even though they probably won't listen).
Make sure your house is in order first, otherwise you can't help anyone.
You're #1.
You're the only one.
Go get it!
JC
OK, Now Get Caught Up
In case you missed anything from that past couple of days:
- Bitcoin Crashes Just Like 1987 - What happened Friday?
- Hall of Famers Report - The 100 Largest Stocks in the U.S.
- Commodity Correction - Download this week's Commodities Chartbook
- Stocks, Bonds, or Both? - Which ones are we buying?
- Live Strategy Session - Watch the Video & Download the slides
Have any questions?
Shoot me a note. Let me know what you think!
Or feel free to give us a call any time: (323) 421-7991