Here is the Market Note I sent to Education Members on 12/17/23:
After running my Educational Product for almost 4 years, I am surprised that the recent strength in the market caused more stress for people than the bear market of 2022. I received more emails from members in November than I did during the entire 10-month bear market in 2022. This is very strange because the market did nothing but go down for 10 months in 2022, and even longer for many growth stocks that topped in February 2021. It’s also odd because I’ve called this market accurately in all my videos since the November 1 follow through day and kept members on the right side of the market.
I would say that 90% of the questions I get have to do with the same concept: making decisions. For example, when do I buy? How much should I buy? What should my position size be? Should I buy all at once? When should I add? How many positions should I own? When should I take profits? Should I take partial profits? When should I stop myself out? Should I hold over earnings? etc., etc.
These are all great questions, but here’s the problem: THERE IS NO RIGHT OR WRONG ANSWER! The honest answer to all these questions is: IT DEPENDS. This is not an excuse; this is just the truth because there are too many variables. For example, your age, investment objectives, are taxes an issue or are you trading in a retirement account, are you working full time/in a different time zone, or can you watch the market during the day, how invested are you, how many positions do you own, are you saving for your kids college, saving to buy a home, saving to pay for a wedding, etc., etc.
Also, stop thinking that anyone (including myself) has the right answer. I simply make my decisions based on probabilities. Sometimes I get it right and many times I get it wrong. In fact, I’m wrong a lot, I just try not to STAY wrong. As I’ve said many times, I just make decisions and I’m ok with them. Earlier in my career, I used to obsess over the shoulda, coulda, woulda, and it would drive me crazy because I would constantly be second guessing myself. Once I made the decision to stop this, it’s amazing how much clarity I gained in my trading. You’re never going to get the high or the low, so just accept it and stop torturing yourself.
So, what’s the point of all this? It’s to encourage you to get better! Any question you ask can be answered once you overcome your fears and learn how to make decisions. It’s not easy at first but it’s like building a muscle. Start with smaller weights so you can lift heavier weights. In the market, start with smaller positions and constantly look to make progress. For me, I keep a concentrated portfolio for clients of about 10-20 positions in a strong, uptrending market. Each position can range from 1%-10% of the portfolio depending on many factors. Does this work for everyone? Of course not! But it works for me after years of trying different things and concluding that this fits my money management style. I encourage you to work on a plan that fits your timeframe, risk tolerance, and overall investment objectives. If you don’t have a plan, work on fine-tuning one so you’re not just trying to chase the next hot stock every day.
Also, please stop listening to all the noise out there and focus more on the price action of the market. Over the years, it seems like more and more people are worshipping anyone who goes on TV, anyone who has a blog, or anyone who “appears” to be an expert. Of course, I respect other people’s opinions but stop worshipping others and start worshipping your own ideas, your own thoughts, and your own conviction. I say this because too many members tell me they hesitate because “so and so” said something opposite of what they were thinking, and it caused them to hesitate. Please keep in mind that even the experts get it wrong, but the smart ones adapt quickly.
I sincerely appreciate all the kind comments over the year and want to wish everyone and their families a Merry Christmas and a Happy Holiday season. Here’s to making continued progress in the New Year!
I can be reached at: jfahmy@zorcapital.com.
Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained on this blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned on this blog. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.