Fear and greed. It’s all that makes any market. As a bear, I’m feeling greedy as the market collapses, as it has over the past five weeks. Greed served me particularly well last week. Also, as a bear, I feel fear, since to be blunt, virtually the entire world is aligned against me and my interests.
This fear has been born from hard experience, such as what I went through in October of 2022. For most of the year, the market has been going splendidly my way. I make doing amazingly well.
In fact, I distinctly remember thinking to myself, “What am I going to do with all this cash? I don’t need all this money!” Well, the market heard my cries and decided to take care of that problem swiftly and powerfully. I no longer had to ponder such imponderables.
I called this event The Rolo Bottom because I vividly remember walking a dog I was fostering, Rolo, on the streets of Durham, North Carolina before the opening bell. I also remember saying out loud, to no one but the dog, “this is going to be a very good day.” The exactly opposite turned out to be true. It opened at its low and basically went straight up for the next 39 months. It really, really sucked.
In retrospect, it’s easy to ask myself: what on Earth was I thinking, sticking with my short positions? It was such an awful experience, the memories of that wipeout have been a meaningful tax on all future profits, since I’m constantly looking over my shoulder.
My point being that when things are going as well as they’ve been going, it’s crucial not to get intoxicated by the success. I’m honestly trying my very best not to let anything like that ever happen again.
