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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"

 

“I have heard many men talk intelligently, even brilliantly, about something – only to see them proven powerless when it comes to acting on what they believe” - Bernard Baruch

 


#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.