How many times are you going to show up talking about how good you did in January while the rest of us watched the weather and missed the boat?
the post you responded to doesn't even mention my January experience. it talks about January in the context of overall returns from a trending market, and loss aversion myopia. these are topics which are of interest to the intellectually curious. the subtext, which i am sure you missed, is that focusing on noise does not improve returns.
these are GENERAL THEMES, which i guess you don't want to hear about because YOU PERSONALLY didn't benefit from them. that's fine. i'm happy if the guy on the other side of my trade bases his strategy on a thermometer. i am not buying next month's NG--the weather next month or this month doesn't matter to me! and even if it mattered, the weather is about as public domain as information gets, so it is high folly to think that knowing what the weather is gives one an informational "edge" in the market.
i am buying a long-term asset which is fundamentally the NPV of a set of discounted cash flows. COS has 60 years of reserves. do you think the weather next month will make a significant difference in their cumulative returns? i don't! the same goes for SU.
OTOH, SU was up 26% in Jan alone. that is highly irregular, especially considering it finished 05 at the high of the year. many energy stocks experienced such irregularities in January. that is how i think of them--irregularities. they are random events which happen irregularly. that is why, when they occur, they are not likely to be repeated soon. since they are (from an investor's perspective) positive irregularities, they can be thought of as gift horses and not looked in the mouth.
You focus on one month, some of us are riding several years of good gains and are very wary of conditions that can be quite unforgiving.
like i said, look at a chart of market returns arranged chronologically. the big gains often come in VERY SHORT bursts. if you are out at those times, you miss the bulk of gross returns. or you sit out the big gains due to noise and loss aversion myopia (the things you are upset that i write about, even though learning about them would i believe be more beneficial than checking the next Accuweather report), and then maybe jump on late in the rally (why? the weather's still bearish, isn't it? isn't this switch from thermometer-assisted trading to momentum trading kind of changing horses in midstream?) when the stocks are already in distribution.
Sure I wish I was in oil sands or offshore plays or in OIH. But I cant be everywhere all the time and still stay focused..
what does "staying focused" mean? checking Accuweather? i think somebody who read Deffeyes in 2003, put their money in oil sands and midcap producers, and went to sleep for three years did better than the people who were "focused" on noise.
my suggestion to you is to read the second edition of Taleb's Fooled by Randomness. |
