Don’t Lose Sleep In This Blizzy Blizzy Bizzle Boop Market

The market pulled back! Oh my goodness. I thought stocks only went up.

The question remains whether or not this is the beginning of the end, even if the end is a whimper leading to a slow grind lower over several months and not necessarily a crash. That said, I don’t quite hate the markets as much as I was hating on them last week,

Was with Amaris last night, she slept so hard which meant I should have had a great night of sleep. But a toy of hers went off at 2am “Blizzy blizzy bizzle boop” and I woke up in the middle of a weird dream about stocks and blinking green and red stock tickers as seen from a sled that had a remote control going down a hill with a virtual reality camera…or something like that. I never got back to sleep as I couldn’t turn back off my brain and get back into the REM. The toys only turn on like that in the middle of the night on the nights that she sleeps well. If she’s up tossing and turning and keeping me awake, the toys automatically stay quiet!

I was, however, ready to rock this morning and have been pedal-to-the-metal all day at the office. I’m running a hedge fund and I take it seriously and I love my job even as the thoughts of it often creep into my head early mornings.

For most of you reading this however, your investments and trades should not be affecting your sleep. You should sleep each night knowing that you own good stocks in a balanced portfolio that is positioned to grow but, especially right now in this ongoing Blow-Off Top Phase of the Bubble-Blowing Bull Market, also has plenty of cash and/or hedges.

Did you freak out this morning with a big knot in your gut when the stock market was at its lows? Were you positioned too aggressively and saw big losses on your sheets when the panicky selling finally abated? If so, you’re probably still too long and I’d suggest trimming a little bit if you were stressed this morning. Take some of those outsized profits you have, especially in companies that are trading at 100-1000x revenues because they are start ups and probably should still be private but since they’ve gone public in the last year or two, they’ve gone up like 200-700%. Consider yourself lucky and slow down again. Let the markets pitches come, as we are going to continue see some great trading and investing opportunities develop throughout the course of this year.  But don’t let yourself get caught up into the Fear Of Missing Out Trade that is dominating the markets in this current time and place.

The idea that you should never trim, never take profits and never play defense is not a good one. Defense wins championships is what they say in sports. The same saying it’s true in investing in many ways too. Think about defense.

Amaris isn’t worried about it too much, but here’s a shot of her this morning as she and I were debating the idea of open source currency platforms and she started pondering where bitcoin is headed next. See you tomorrow.

We will do this week’s Live Q&A chat at 9am ET tomorrow (Friday), in the TWC Chat Room or just email us your question to support@tradingwithcody.com.