The market has rebounded well since the lows in late December. What surprises me is all the negativity I’m seeing. The reason it’s surprising is that sentiment tends to move with price. Meaning, when the market moves up, people tend to get more bullish and vice versa on the way down.
When I tweeted about this earlier today, the responses I received all had to do with psychology. The responses included words like: pain, wounds, prisoners of fear, trauma, no trust, high emotions, hatred towards politics, and the market ruined my Christmas.
Of course the market could go lower from here or it could go to new highs, but I don’t care. This blog post is not about the market. It is about overcoming fear. Too many people were traumatized in the fall of 2018 and complain their wounds are still fresh. That’s a bullshit excuse and that’s weak. The reason I call bullshit is that people still complain that the financial crisis of 2008 is still fresh in their heads. I realize it was a traumatic time for millions of people but when are you going to move on? It was over 10 YEARS AGO!!! Stop thinking the next correction is going to be just like 2008 and worried that the next bear market will be the end of the world. Do you know how rare 50% corrections are??? I have a feeling people thought the correction in late 2018 was going to turn into 2008 and when it recovered quickly, they were unprepared and too traumatized to get back in…even though we had two valid follow through days and plenty of leaders were setting up and breaking out. Again, if the news affects your mental state, turn it off. If social media is too toxic, get off it.
You might be thinking “Joe, you’re being too harsh.” No, I’m saying people need to be mentally tougher and learn to pick themselves up quicker. I lost money in 2008, but it didn’t stop me from having a killer year in 2009. I lost money in 2018, but it hasn’t stopped me from recovering well so far this year. Bottom line: Stop living in fear. We’ve all lost money in the past and we will lose money in the future. The best in the business are the ones who can recover well, stay mentally tough, and separate their emotions from their investing. Good luck!
I can be reached at: jfahmy@zorcapital.com.
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