There’s nothing wrong with betting on the next direction of a stock, or the market in general. But let’s be responsible about admitting that we’re wrong, when we get it wrong.
Regardless of your strategy, whether it’s technical, fundamental, economics or even if you base your analysis on the movements of the stars and the moons, it all comes down to risk management.
How good are you about admitting that you got it wrong and moving on? If you suck at it, then you’re not going to do very well and you’ll be gone soon. That’s economic Darwinism at it’s finest.
The ones who are the best at admitting they were incorrect in their assessment, and doing so the fastest, are the ones who make (and keep) the most money over time.
It’s really that simple.
How do you lose weight? Eat less and workout more. Duh.
But cupcakes and pizza are delicious.
Just like admitting we’re wrong is very difficult for us. It’s one of the hardest things for humans to do.
Just imagine if these permabears admitted 4 months ago that they got it wrong. Even just 4 months ago and they could have already turned in a huge return. It’s hilarious when you think about it. [Read more…]