The hardest trade is usually the right one because everybody else is doing what’s easy…
I do think it’s a better time to buy than to sell right now. Easy does it though. Trying to catch a perfect bottom is the quickest way to getting wiped out.
Meanwhile, there are some very important psychological lessons to today’s action.
Do you feel sick to your stomach over this market action? Can you handle the pain? This won’t be the last time the market tanks, so remember the way you feel right now.
How hard is it to buy right now?
Remember how great you felt two weeks ago as the DJIA cross 12600 and we were levered up and aggressively long? You’d just nailed the Google and Sandisk trades and the portfolio was at all time highs. How hard was it to sell and raise cash and walk away for a break at that point? Didn’t you just want to keep pushing, gambling, trading, buying? Wasn’t it easier to be a bull at the top?
The hardest trade is usually the right one because everybody else is doing what’s easy — and the near-term market action makes a fool out of the masses most of the time.
Doesn’t mean we’ll head straight up tomorrow or that this sell off will be over when we finish buying. But nobody’s gonna say that buying is easy right now, and that’s probably a bullish thing.
