Market/trading thoughts.
This market has been on a tear, the size and sharpness of the bulls horns is just unreal.
I have been watching and/or trading for some time; have never seen anything like this.
Mt biggest concern is that I/others will think that trading/investing is now a "can't lose proposition"
People now think that 30% annual returns are either normal or too low.
The scam artists are getting rich selling books/courses on how to get 100% returns by next Thursday.
People are setting up margin accounts using equity from credit card borrowings.
Finance companies are running TV adds telling people to take out home equity loans to use in the market.
Bzzzzzzzzzzzzzzzzz---WRONG
If one has been long this market and has been using stops and/or cutting losses quickly it has been a "free lunch", 99.99% impossible to lose.
If anyone is not making money in this market it is their own fault; not the economy, not the market makers, not because the stars are missaligned.
This has me scared. I worry every single day that the worm is going to turn. When? I have no idea. But turn it will.
All I am trying to say to all my Z friends is to be vigilante; enjoy this run but be very careful. From past experience I can tell you that it is super easy to give back your gains in 1/10th the time it took to make them.
Look at it this way. If you bought Warren's company on 1/1/98 at $46,000 a share, on full margin, with it closing at $69,000 on Friday you would have made 100% on your equity in 11 weeks.
This is not reality!
I have no idea where we go from here. By firecracker day we might be at DOW 12,000, or 7,000 or right where we are today. Not a clue.
I love the market, I eat/breath/sleep trading; spend 14 hours a day at it.
This game is almost as good as sex, putting a 700# bluefin in the boat, getting to the bottom of a black diamond in one piece, or getting hugs from my grandkids.
But it scares the hell out of me at the same time.
Why am I saying this? Not sure. Maybe because Friday was the first day of Spring and here we wake up to an ice/snow storm. A dose of reality.
I had second thoughts about posting my YTD return last night. Guess I just felt the need to toss out a cautionary note. |
