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Momentum21 (96.57)

Navigating the Chaos



August 08, 2011 – Comments (6) | RELATED TICKERS: RHP , SHO , RTI.DL

The biggest fear many of us have is losing control. 

We try to make heads or tails of the market on a daily basis.We seek volume trends, we test risk management strategies and every once an awhile we think we have the problem solved and we dig deeper into our bunker of knowledge and experience.

Whether we are bullish or bearish leaning, the biggest enemy is ultimately always ourselves.

Overconfidence kills when it undermines our probability of success. I am sure many of us our scouring the blogs, financial media and newsletters to try to re-formulate our opinions of this market.

How much longer can I hold my shorts?

When will I deploy the dry powder?

When will I sell everything and step aside?

The only answer is to play with what got you here and try to learn along the way. Changing course based on emotion, headlines or a good blog post will only lead to regret. If you got in over your head and underestimated your ability to absorb paper losses then you need to make decisions based on a longer time horizon. Don't kid yourself and think it will be different next time...or postulate how the money can be made back with a change of strategy. The shorter the time horizon, the more difficult the challenge over time. It is more than fine to throw in the towel but don't think it will change by trying again. 

I would contend that our patience costs us more than our bad stock picks.  

These days have been trying when you watch the ticks. I have certainly reflected on whether I should act more frequently or "change it up" but in the end any investing strategy needs time to unfold. 

It takes years to separate the lucky from the good...and with investing lucky can be dangerous if you are playing for the long haul.

Good luck to all!  

6 Comments – Post Your Own

#1) On August 08, 2011 at 11:50 PM, Momentum21 (96.57) wrote:

Mr Dax must be super-stressed these days... 

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#2) On August 09, 2011 at 12:47 AM, Momentum21 (96.57) wrote:

this is what I looked like all weekend... : ) 

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#3) On August 09, 2011 at 11:08 AM, Momentum21 (96.57) wrote:

The Germans are popular subjects this week... 

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#4) On August 09, 2011 at 5:00 PM, Momentum21 (96.57) wrote:

That post Fed meeting dip make you think twice? : ) Wow...

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#5) On August 26, 2011 at 2:31 AM, addikt06 (< 20) wrote:

You sound like a day trader. 

The problem is not "patience"... the problem is not accepting when you've misread and continuing to hold whatever position.

Most of my best picks in real life were when I knew I was right but the market (namely day traders or maybe computer algorithms) were going the opposite way. I've made money in both long and short positions with "patience" and having the balls to stick with what I consider right. 

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#6) On October 29, 2011 at 12:49 PM, Momentum21 (96.57) wrote:

I've made money in both long and short positions with "patience" and having the balls to stick with what I consider right. 

that's kind of what I was saying here, no? The problem is patience. It can take years to understand something you might have "misread".

Sometimes the market takes a little detour and your well-researched plans go out the window for a bit... : )


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