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Something long term bears do not want to hear


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#11 NAV

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Posted 02 December 2017 - 03:05 PM

 

 

 

As ultra-short-term technical traders, a day at a time, you probably don't care

 

 

Libertas,

 

Even a short term trader like me who holds position between 1-10 days will need to have some kind of trailing stop. A long term investor can do the same with trailing using a 5 ATR on monthly charts. But most don't do, because that's too simple. They overcomplicate their lives by watching and worrying about lot of macro stuff. And do not tell me a 5 ATR trailing stop on monthly charts won't work. Try it. It will make your investing so simple.


"It's not the knowing that is difficult, but the doing"

 

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#12 libertas

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Posted 03 December 2017 - 08:03 AM

Ah, investing. There's a much-abused word. IMO, anyone who is long stocks right now is a speculator, not an investor. Sure, using an ATR exit is a reasonable trader's tool. But then you have to figure out how to get back in without getting whipsawed. But a whole lot of people think they are investors - a notion constantly reinforced by the financial propaganda machine - and have no exit strategy at all. A bunch of them are my friends, sadly. They are not going to have a good time over the next few years.

 

But anyway, I was convinced many years ago that being long the right asset class was a better investment strategy than trying to time stocks. That's why I'm long Treasury zeroes. My investing strategy is simple. I need conviction that the value is there, regardless of timing, so that I can sleep at night with confidence. I don't have that in the stock market.

 

But of course the bubble offers magnificent opportunities on the short side, purely as a speculative venture, not to be relied on for lifestyle funding. So I'm here in large part because I want to take advantage of those opportunities and that involves "watching and worrying about a lot of macro stuff." As well as watching the technicals, of course. I do try to take a holistic approach, which has worked very well for me in the last two bubble collapses, rather than trying to find the ultimate signal. 

 

I do keep my investing and speculating activities strictly separate, in different accounts, I do expect to resume investing in stocks and have the same comfort factor in the underlying value proposition. But probably not for a couple of years.

 

I look around and I see shoeshine boys (and girls) everywhere. Just reading about the yoga instructor who is now a Bitcoin guru. And Marketwatch is offering help on putting Bitcoin in your retirement account. I see a headline: "Forget Bitcoin, these four stocks are up over 1,000%." Not good.