Patience with our investing and our money can be the key to long-term success. Here’s a great quote from investing legend BenjaminGraham to start out today’s report:
“People who invest make money for themselves; people who speculate make money for their brokers.”
There’s a time and place for being aggressive, for trading, for using options, for betting big, for buying baskets of cheap stocks, for buying something fun, or investing in something you can actually play with. Long-time subscribers know that I am always opportunistic and you can safely assume that my patience with my portfolio is partly predicated on the fact that I just don’t see a whole bunch of great risk/reward pitches right now. You know that the next time you see me trading and investing more aggressively, it’s because I think the time and place for doing so is right. Not because I simply want to put money to work, want to seek out an adrenalin rush or give you a trading idea that’s not terrific simply to be giving you a trading idea at all.
Most trading and investing subscriptions fit into one or two categories:
- Same old ideas and themes over and over, no matter the economy, the prices, or the markets. Gold bug newsletters, permabears, and permabulls — you know these hot shot thinkers who can lay out a million reasons why they’re right and the markets are wrong.
- Then there are the trading (gambling?) subscriptions that promise short-term trading ideas that are supposedly safer because you’re not holding the trades long-term. Some target day-traders, others target swing traders, others promise riches from buying and selling complex option strategies.
I don’t think there’s a lot of value in either approach.
I want to have a long-term sustainable approach for both my own money and yours. I tell you guys up front that I think it’s a terrible idea to lock yourself into any dogmatic analysis. The markets and the economy and prices change over time. Tech and political revolutions happen all around us every year. So you need to be flexible in your analysis, your timing, your trading, your investing.
It’s an even worse idea to try to make steady income off of short-term trading strategies of any sort. Because you’ll always eventually run into a cold streak, maybe one that lasts a few weeks or even a few months or even a few quarters. And if you’re depending on short-term trading or short-term option strategies to support yourself and your family, you’re going to end up in making trades in desperation rather than grounding your trading and investing in sound risk/reward analysis.
Let’s remember why we’re risking our hard-earned capital in the first place. This isn’t supposed to be fun or exciting (though it can be at times). Let’s continue to take the long view on our trading and investing. Maybe there is something to all this being flexible, being patient and investing in the most revolutionary companies on the planet.
I do think there are some interesting longs and shorts out there to look at and I’m going to make one small options trade today that I’m writing up right now and will send to you momentarily, but I’m still not ready to move on any of the others that I’ve been working on lately.