“Keep stops tight on your stocks as when this market pulls back even 1-2%, the better names often sell off much harder, giving back in one or two days what it took one or two weeks to achieve. QE forgives the general averages while higher octane stocks can get pummeled.”  — MLR, Premarket Pulse 11/25/13, virtueofselfishinvesting.com  (a trading newsletter I follow)

It’s been a while since I’ve posted, so a little pre-amble / refresher:  I stopped trading because I wasn’t doing very well relative to the market (I was flat, market up nicely), and I realized something was wrong.  I had studied this too much to not be be able to get a better return than just “holding and forgetting”.  And since I cannot and will not buy and hold — an extremely dangerous investment strategy — I had no alternative but to just take a break and re-evaluate.  A lot of other famous traders have been doing quite poorly in this market, all with a somewhat similar system based in trend following and / or technical analysis of leading growth stocks.  And they’re the ones I had latched on to as the best strategy (they’re all quite rich) that best fit my trading / investing mentality.  Unfortunately, in an environment where the Fed is pumping bazillions (sic) into the economy to provide us with “nose above the water” growth, this strategy does not work.  This is not a ‘normal’ economy, and the market reflects this.

I believe that we are at the dawn of a new historical era…either on the cusp of a massive crash, or a massively robust decades-to-centuries long…what shall I call this…”Savvy Economy.”   (If this happens and the name sticks, remember you heard it here first.  🙂 )  I give the edge to the latter, and I’ll make the case for this in a subsequent post.

2 Comments on Why I was sucking my thumb

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