In the wake of this week’s events, I thought I would take a moment to remind everyone that nothing should surprise you.
The longer you’re in this game, the more things you see. The newer you are at this, the easier it is to not know some of the history of markets.
And that’s okay. You don’t have to know everything the moment you start.
That’s what the experience is for.
But I will let you all in on a little secret, regardless of how long you’ve been around:
Anything Can Happen
Repeat after me….
Anything Can Happen.
If there’s an event that occurs that surprises me, that’s because I wasn’t prepared for all possible outcomes. That’s it. Plain and simple.
I forgot that “Anything Can Happen”.
It’s not the market’s fault, it’s my fault. Period. No one else’s.
Go read up on what occurred this week if you’re interested in it. But long story short, there were forced liquidations by large players in bellwether stocks for their industry.
It’s something that occurs quite often. Maybe not to this extent and velocity all the time, but a daily occurrence no doubt in one way or another.
Do you think your “support” levels matter in that environment, where margin clerks don’t gaf? They’re selling it and they’ll take any price someone is willing to pay, no matter how low it is.
They don’t care! Why would they? They’re just doing their job. Any they’re good at it. They’re protecting their employer, not the dude who couldn’t meet the margin call.
And this brings me back to what we do.
We look for potential levels of support, and potential levels of resistance when analyzing markets. But to be clear, these are only, “Potential” levels of support and resistance. These levels “Might” and/or “Should” hold as support or turn into resistance.
Again, always a potential, because the one thing we do know for a fact, is that we don’t know what the market will do next. That we know for sure.
And it’s liberating to acknowledge it: the fact that none of us know what will happen next. I often find others (and I’ve been guilty of it too) putting too much pressure on themselves to “Predict” what the market will do next.
But that’s the whole thing. We’re not in the Prediction Business. That’s for fools. We’re in the Risk Management Business.
Do you know why?
Because Anything Can Happen.
Nothing Surprises me anymore.
Bear Stearns and Lehman Brothers gone overnight? Yup.
Crude Oil trading below zero? Yea sure why not.
Irrelevant companies like GameStop and AMC exploding higher squeezing out hedge fund shorts? Of course. All day baby. Bring it.
Nothing surprises me anymore.
Why would it?
I’m punch drunk at this point.
What the hell’s the difference?
Crude Oil to 200. Copper to 10. S&P500 at 5000 or 10,000?
Sure why not?
Crude Oil at 10, Copper to $1 and S&P500 below 1000? Sure that could happen too.
I don’t know.
I don’t care either.
I stopped caring a long long time ago.
These were lessons learned the hard way.
I cared way too much. I was emotionally invested in things playing out how I thought they would, or worse, how I wanted them to.
In the old days, I would consider others and the economic and social implications of the market doing what I thought it might. It would drive me nuts.
But then I stopped. Why should I care? What control do I have over the situation? Why am I to blame?
It’s not my fault.
I should not care.
I have to protect myself and my family. And then I try to protect readers by publishing my views right here on this site.
And while that helps others (thanks for all the nice emails by the way), the process of putting my thoughts down on paper and really forcing myself to think through things, is a very therapeutic process for me.
I encourage everyone to write. Every day. Whether you share it with the world like I do or not. Just write it down. Every day. Trust me.
And also join me in the Not Caring Or Being Surprised Club. It’s a good club.
It brings an element of freedom and peacefulness that I don’t think many truly appreciate.
Anything can happen.
Anything. Embrace it.
Nothing surprises me anymore….
How about you? Do you get surprised? How come?