Here are excerpts from the memo I sent to clients this evening. It's a summary of the market so far this year and some possibilities going forward: I am very pleased that we survived the first 2 weeks of 2016 with our heavy cash position. The first week of January was the worst 5-day start in the history of the [...]
I received several emails over the weekend from people who are really struggling and panicking about this market. This is not the end of the world. This a correction, plain and simple! The biggest challenge most people are having with their investments is: Should I just leave everything alone? Or should I cash some out? [...]
The stock market is a master manipulator. It conditions us to think a certain way over and over and over until we are convinced of a pattern. Then, just when we think we have things figured out, the market magically changes character. Keep in mind that a pattern can continue for a long time before [...]
“In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edgewater Hotel in Chicago. Collectively, they controlled more wealth than the entire United States Treasury, and for years the media had held them up as examples of success. Who were they? Charles M. Schwab, president [...]
I get emails all the time from readers of my blog, but something very interesting happened last week. I received 5 emails in a row all having the same theme: FEAR. Random people wrote to me saying: "I'm horrified of this market," "I'm scared that my stocks will collapse," "How do I overcome my fear?" [...]
One concept many traders struggle with is that their ENTIRE account doesn't have to be invested at ALL times. There are times (like the correction we're going through now) when you should have at least some of your money in cash in order to protect capital and to protect confidence. 1) One of the main [...]
This Thursday, September 17th, the Federal Reserve will announce their decision on interest rates at 2PM EST. I don't think they will raise rates for the following reason: 1) Since the financial crisis of 2008-09, the Fed's number one priority is to see a strong recovery in the economy. They have done this by keeping [...]
Part of my investment philosophy is to look at the positive and negative signs in the market and adjust my investment levels accordingly. It is important to keep an open mind when doing this. Don’t get too caught up in what “you think the market should be doing.” Flexibility is important but being stubborn gets [...]
One of the greatest trading books ever written is Reminiscences of a Stock Operator. The original book was published in 1923, but in 2010, an Annotated Edition was produced by Jon Markman. This edition reveals the truth about Jesse Livermore and provides colorful, historically accurate commentary on the characters, places, and events that have made [...]
In my 19 years of trading, I’ve never seen so much bearishness, fear, and apathy, especially with the market at all-time highs. I’m not talking about the long-only, buy and hold crowd. Those people are always bullish and they NEVER sell. They just ride the market all the way up, and then all the way [...]