“It wasn't until I was reading my fifth or so investment book, all by some of the great ones, that I realized that all successful investors use the same exact strategy... it only matters what the market does, not what it should do,” writes a wise reader. “You can't make money being wrong, and if you're not judging yourself by what the market does...you are going to be wrong a lot.”
Step Aside!
Well said. That’s some important perspective we all need to keep in mind.
When the market fails to confirm your thesis, it’s time to step aside. Traders say that they never “marry” a stock. That’s because once you fall into the story, you tend to lose perspective. You seek out only opinions that confirm your thinking, tossing all other analysis out the window. Inevitably, this behavior leads to ruin.
Even if you aren’t a trader, it’s important to adopt some of this thinking. You don’t have to drop all of the conviction from your investing strategies. Just know that it’s impossible to tame the market. If you try to fight it at key turning points, you’re going to get burned.
The best strategy is to keep in mind that if your thesis has failed, its time to step aside.
No comments:
Post a Comment