Thursday, January 07, 2010

A Short Speech About Opportunity Costs

Re-post from Evil Speculator...

I’m not as fast as I used to be and I miss a lot of opps to book good, quick profits and then fire-back again on the first entry; grinding grinding grinding each day to another 200% year.

But I don’t blow-up every couple of years anymore either.

Michael Davey here…

So there you go - age will slow you down, gumption wanes and aversion to risk grows. And if you don’t exercise the soul you’re as good as walking-dead by age 30 (not joking). At the same time though, you learn something which might be valuable; should you insist on paying attention.

One of the things I’ve learned is - the market is bigger than me, it doesn’t care about me and therefore if I want to make money (and never blow-up), then I don’t care about me. I don’t give a rat’s ass what I think.

Even though I’m analyzing all the time, I don’t give it much credit if it flies in the face of what is happening on the tape. There is an art to this, and there is a burn when things churn, but in general I believe it is best to discount conviction and over-weight an actual trend.

If I don’t agree with the market, I can go on vacation.
Or else I can agree with the market.

This is not a blow-my-own-horn brag-post. This is a response to seeing mistakes of my past flowing through the comments of this and other sites. Guys who have been short for a lengthy period are fighting fighting fighting and all the while their conviction and energy is waning waning waning. When the market turns down, even though I’m such a withered snail, I will get short and I will believe in my position.

I won’t be exhausted and I won’t need to take a quick profit just to prove those still exist.

I’m not telling you guys to get long here. There are a lot of sloppy signs right now and you are pointing out more and more every day (and then more and more the next day ;). But learn how to surf my friends. Wait for the chop to pass before paddling out; especially in the bigger swells. Don’t blow-up!

That’s it. I’m going back to buying stupid stocks now which are still rising. If it weren’t January I’d be on vacation instead, like you wish you had been (I know because I’ve been there - I have a right to give us both a hard time; I don’t take it personally; hope you don’t either).

Now this from Walmart…

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