The best lessons are learned the hard way.
That’s just the way life goes.
One of the most important things I’ve come to understand about markets, and life, is that you have to worry about yourself first, you have to take care of your family first, and then you can go out and help others.
If your own house isn’t in order, not only are you not able to help other people, but you may actually do more harm to them than good.
Depending on where you are in your life, that perspective may change. But in the market, as an investor, there are no exceptions!
You’re only in it for numero uno.
Just to be clear, if you’re in the market for ANY other reason other than to make a profit for yourself, then you are unbelievably confused.
So if the only goal of investing is to make money, then why would we care about the implications of market moves?
If stocks crash, is the economy likely to suffer in the near future? Yea most likely. But why is that my problem? What does that have to do with me and my portfolio?
I’m only interested in shorting stocks during that downtrend and/or being cash heavy or long Treasury Bonds. And then after that, where are we accumulating equities and putting risk on again?
There is no time to worry about the economic implications of our bearish thesis being correct. There’s only time to worry about ourselves and what we’re gonna do about it.
I learned this lesson the hard way in New York City back in 2008 when I would wake up every day hoping for horrible things to happen.
Unemployment rate spikes? Great. Lehman Brothers & Bear Stearns are gone and thousands of people are now out of a job? Awesome! Stocks are crashing and people everywhere are losing their savings? Terrific!
I was short.
These were the things I was rooting for to happen. And I was only 26 years old at the time. I didn’t understand then what I understand now.
This was really really difficult for me. I didn’t want people to lose all their money or lose their jobs. Why would I want that? That’s terrible.
But I was short all the bank stocks. So this was “good news” for me, even though it wasn’t for almost everyone else.
These were really hard lessons that would serve me well in the future.
Fast forward to the end of 2016. I was living in California. Throughout the summer and into the Fall that year, Technology stocks and Industrials were breaking out, and things were looking incredibly promising for equities, and risk in general. But we were just coming out of that 2015 market correction and sentiment was bleak.
And then Trump was elected.
“The world is coming to an end”
Sentiment was in the dumps and people were scared to death. So many were racing to cash, “leaving the country”, etc etc – you remember.
This was the exact opposite of my experience in 2008. Back then everyone was rooting for good things, while I was betting on the end of the world.
In late 2016, everyone seemed to be rooting for bad things to happen, and I was betting on a face ripper.
I’m not sure that I would have come to that same conclusion or been so aggressive in 2016, had I not experienced those difficult times in 2008, mentally.
It made me stronger.
2008 taught me not to care.
How could I?
Why would I waste brain energy on things that I have no control over?
I only have to worry about profiting from it.
We might not like the way the world works. But we’re forced to invest in the world we actually live in.
We don’t have a choice.
I can give you a list of hundreds of things I don’t agree with in the stock market, and business in general. We can go on and on about politics all night if you really want.
But for what?
I don’t have any control over those things.
You’re welcome to do whatever you want to do in your portfolio. I’m not going to tell you what to do. Mostly because I just don’t care. Why would I?
Your portfolio is your problem.
The decisions a CEO makes, for example, is his problem and the problem of his employees, not mine.
China wants to ban crypto? That’s their problem. Why should I spend any time worrying about what Chinese people are doing with their Crypto? I have to worry about what I’m doing with my Crypto.
Investing is a selfish endeavor.
I can’t help it if people want to do stupid things with their money? That’s their problem. We can’t babysit investors.
What am I gonna do, go bar to bar every night counting how many drinks people are having and remind them how bad it is for you?
Am I gonna stand in the checkout line taking all the sugary foods out of the shopping carts of the heaviest people?
If they want to kill themselves, what can I do?
If they want to YOLO Tesla Calls or Gamestop with their life savings, I can’t stop them.
There’s nothing I can do to help them, and I can’t waste anytime listening to anyone who thinks they can.
I’m too busy focused on what I’m doing.
Because managing my portfolio properly is hard enough, almost impossible when you really think about it.
So it’s nice to be a technician. I get to put my time and trust in price, which just so happens to be the only truth in all of this.
So when it comes to investing, I just don’t care about all that other stuff.
I care about making money.
That’s the only reason why I’m an investor.
What about you?
Do you care?