The Archives

• Big moves usually don’t happen in a day, be patient
• Don’t fight the market
• Don’t jump in or out all at once
• Markets tend to move in 3 day cycles, don’t jump the gun
• Don’t buy at the daily high, at least wait for a retrace
• What is the upside opportunity vs the down side risk?
• Risk always goes up with increasing reward– the market is very efficient in that regard
• You have to take a position on market/stock direction–that’s the hard part
• Don’t try to pick the top, or the bottom– as Joe Kennedy said “Only a fool holds out for the top dollar”
• The past does not predict the future–this is basis of technical analysis–it is a mirage
• The moves in the market are best understood as the ebb and flow of fear and greed
• Markets will move–that much is certain
• Resistance levels and trend lines are real — because others believe in them

Well:

• High fees
• Lack of transparency (what are they holding)
• Trading rules (how long you have to hold them before they don’t extract a penalty)
• Only bought or sold at the end of the day
• A track record no better, and usually worse than indexes over time
• Sometimes ugly tax consequences (e.g., having the value drop considerably over time and getting stuck with a capital gains tax)

As much as I like to look at stock graphs, there is one thing to always keep in mind: the past does not predict the future.

Just when we think we have spotted the pattern that will make us rich, the market will teach us otherwise.

What looks obvious in retrospect is far from clear in realtime.