Another year, another SEC college football
championship. Here is the recap. Alabama,
winners of two of the last three championships, lined up against an overmatched
team from Notre Dame. Alabama's running backs were better, their
offensive line was better, their quarterback was better, their defense was
better, and most importantly their head coach had already won THREE
CHAMPIONSHIPS. Yet there was a case for
all the "what ifs" that could help Notre Dame win.
It's human nature to come up with the
contrarian view. And that's a beautiful
thing when it comes true every once in a while.
However the final score was Alabama 42 Notre Dame 14. The obviously better team kicked the hell out
of the contrarian bet. And along the way
they delivered a very clear message to traders. Pardon me for the overuse of the following word,
but once again, the obvious outcome was obviously right.
Here is the lesson for traders. Successful traders are contrarian by nature
and that's a good thing. However, and this
is a HUGE however, we must be contrarian in a smart way. When the trend is down SHORT. When the trend is up BUY. And when the mania is at a fevered pitch, be contrarian and fade the direction. But most of the time
the trend is at a sustained boil. And
trading setups in the prevailing direction most often work.
Often times we traders are given the absolutely perfect
textbook trading setup and many times we do the exact opposite because its too
OBVIOUS. Don't, for the love of Jesse
Livermore, take the contrarian bet in this situation. There is a reason these trades are obvious;
they work. Take damn trade, we the
trader have worked hard enough to finally recognize these trades. Don't let the egotistical urge to scream
"I told you so" get in the way of taking cash to the bank.
We, as humans, love David versus Goliath, the Amazing Mets, Douglas
knocking out Tyson, etc. But over time,
the long lasting money is made betting on the sure thing. The trend is your friend. Seriously it is. I'd rather be the most boring rich guy in the
room than the guy that got it right once when no one else did but is poor
because he got it wrong 99 other times.
One last time, would you bet against this man?
Hell, I almost talked myself in to taking Notre Dame on
Monday night just so I could be the guy that was able to say "yeah, I bet
them when they were the biggest underdogs in BCS history." And then I looked at the facts. And I bet Alabama to win. Heavily bet them actually. And you know what? It paid off in spades. Sometimes the obvious trade is obviously
right. So take it. It will pay off. Glory doesn't buy groceries. Profits do.
