These are the types of markets that are a statisticians dream come true. They get to run all sorts of scans and tests to see how long it’s been since volatility did this or the rate of change in the S&P500 did that. To be honest, it’s all a bunch of bullshit. The market doesn’t care about your stats.

I’m not going to go over all of them because I don’t find them very helpful. In fact, I find them incredibly deceiving and, even worse, distracting. I felt that way on the way up with their stupid, “S&P500 hasn’t moved 1% in a single day in x amount of days….”. Who gives a damn?

Today is no different.

Let’s talk about what actually matters. [Read more…]

The market goes through periods of volatility. We’ve seen it before and we’ll see it again. For me, it’s all about learning from this experience and coming out of it a better and wiser investor. Notice how you’re behaving and acting during this period.

I know the way I’m feeling during this volatility is much different than my emotions and behavior in 2008 and 2011 and 2015 and 2018. I learned. And I will learn from this one as well to prepare me better for the next go around. I encourage you to do the same.

Today I want to talk about how, “Bottom fishing can be hazardous to your wealth”. The goal is not to try and catch a falling knife (see here why), but to buy on the way back up.

It’s a lie that you have to buy low and sell high. I’ve found it much more helpful to buy high and sell higher. I’d rather pay more knowing that the trend is up, than trying to be a hero and be the first one in. Notice how we didn’t get bearish stocks until late January, after they had already been rolling over for a couple of weeks, instead of the whole way up last year like many others?

So how do we know stocks are on their way back up? I really like the percentage of stocks above their 200 day simple moving average. This is an indicator that gets quoted a lot in bull markets, but for me, it’s most helpful at the end of bear markets. [Read more…]