Tweet me!- Judge the numbers, and not your feelings. Although I
have outperformed by far, the inherent human desire to view short
term occurrences over long term performance effects even me and I am the
one that came up with these tenets:-). The Janet Jackson song, "What
have you done for me lately" really shouldn't apply to my investing, or
anyone else's for that matter. I have a two year investment horizon. It
is very difficult to hang on to when things go against you for quarters
at at time, but quarters are very, very short time periods in a
fundamental investors horizon. This is the hard part, separating
subjectivity from objectivity. When things look as if they are going to
far against me, I go to cash to re-evaluate my investment thesis, and
change it if it turns out that I was wrong. - Don't be afraid to admit that you are wrong, but don't confuse
being wrong with inappropriate timing. I have no problem admitting that I
am wrong. I also admit that timing can be difficult, particularly in
manipulated markets, which I believe these current markets may be when
trading at low volume. This is the reason why I don't offer buy/sell
recommendations or trading advice on my blog. It is more than hard
enough to get it right myself. - Hedge your positions. I spend a lot of resources in releasing
market neutral strategies that were aimed at preventing significant
losses when the market lurches against your positions. As an investor in
volatility, one actually gains the more the market lurches, in either
direction. Even if one were not inclined to put on a relatively complex
market neutral combo (which is quite understandable), I simply by
S&P call options to hedge against upward surges against my selected
shorts. - I am still strongly convinced that the fundamentals of the market
will cause it to head downward. The reality of the situation is that it
moved up significantly recently. The reality is also that the sharp
upward move is only a portion of the downward move that I illustrated,
and all things remaining the same, those who road the downward move and
got hurt in the upward move are still significantly ahead of the broad
market an most investors. Unfortunately this may not apply to those who
only caught a portion of the moves, but this may apply to any time
period selected.
Good luck to all.
