Trade Alert: I’m Not Hating The Stock Market Anymore

Well, as you might have noted late last week as the market’s declines got deeper and the Nasdaq fell well into correction territory of more than 10% decline from its highs just [double checks calendar] three weeks ago, I no longer outright hate the stock market and most of the stock prices in it. Many of the names we’d trimmed and have been so cautious about have come down 15% or more and are looking more attractive on a risk/reward basis now. Some of the names I’d mentioned on Friday (“SPLK, AMZN, GOOG, ROKU, maybe NVDA”) as starting to look attractive are up pretty big now from their lows. AMZN and ROKU especially and I wouldn’t chase those two right now, but I am finally starting to see valuations that don’t make me sick to my stomach with vertigo.

If you felt like you didn’t own enough of some of our stocks when they were blasting to new highs a few weeks ago, now’s a good time to start nibbling on some small tranches. If the markets have another day that’s down 2-3% this week, you might want to consider nibbling some call options on some of the names too. Slowly though and no rush. The markets are not out of the woods although I have obviously gotten a little less cautious about stocks now and I don’t outright hate the market as I did a few weeks ago at the highs.

I’m also covering some more of the short index hedges and other small hedges that I’ve got on the sheets, again in no rush.

The single most important thing I’ve learned about golf over the last couple years or so that I’ve been trying to learn how to not suck at it, is that you have to turn with your core, not your arms. Your arm movements might complement the speed and contact you make with the ball, but the distance and accuracy on a good shot comes from making full rotation in your core. It’s like investing, of course. Our outperformance in the markets over time comes from letting our core positions as long-term investments create wealth as we complement that speed and contact with our trades (our arms).

I drove the green on a 280 yard par 4 the other day, leveraging the full rotation of my core and complemented by good arm form and follow through.

It was one of the best drives of my relatively short golfing life. I was so proud that I took a couple pictures of where the ball landed on the green so I could memorialize what might be my first eagle ever. Of course, they had the flag in the back of the green that day and not only did I miss the eagle put from 40 feet out, I hit it too hard because my adrenalin was flowing. So I three putted and got a dang par. So I guess the final deep thought for today is to remind you: don’t let your adrenalin mess up your trading and investing.

Let’s do this week’s Live Q&A Chat tomorrow (Wednesday) at noon ET. Come directly to the TWC Chat Room or just email us your question to support@tradingwithcody.com.