Mene, mene, tekel, upharsin
All journalists worth their salt know the timeless questions, summed up in the words: who, what, where, when, why, and how. These questions are so veritable that they are equally applicable to other professions, including investing. This blog repeatedly delves into the what, the when, and the how, so let us investigate the why...
Why did you purchase what you did? Why didn't you purchases what you should have? Why did you wait to purchase? Why did you wait to sell? Why do you own what you do? What will you do in the event of a sell-off? What will you do in the event of a rise?
During the early-morning chaos of 7 July, I counselled that the market would "reverse up from intra-day lows, rally for approximately the following two weeks, and then..." Well, this is precisely what has occurred; now the two weeks of rally also have expired. We now enter the "and then..." portion of the 'prediction' that so far has followed the script to the letter. As the timer runs out on the short term rally, so do the seasonal patterns conspire against the market's intermediate term direction.
If you typically do not know the reason you purchased and hold an investment, now would be a fine time to know. (No need to feel alone either, as most investors do not know; most simply purchase intra-day volatility.) I receive an increasing number of emails from readers who did purchase Google/GOOG, but waited until the price reached $300/share. At least the decision to purchase was made, no matter how late or high. Most investors, despite my hectoring, have been utterly unable to act at any price. Nonetheless, you should discern your rationale for owning the shares -- especially if the market and Google/GOOG decline in price, or face the consequences of selling at the intermediate term low when the pain of the decline finally becomes too great to bear.
So yes, know thyself. Because knowing all the technical and fundamental analysis gobbledygook is of no help when your emotion-based decisions cause you to buy and sell at horrid prices.
The handwriting is on the wall for a general market decline, or so it appears to me. Mene, mene, tekel, upharsin. Individual securities likely will suffer; some more than others, some less, but likely most. Yes, including Google/GOOG. (To be clear: this does not mean that I suddenly am a bear on Google/GOOG. Merely that I recognize that stocks oscillate within their continuum. A decline in Google/GOOG likely will be shallow in price and brief in time, and could itself suddenly abort due to an event such as being added to the SnP index...)
The market's rapidly changing dynamic does not mean it must decline -- or even should near term. In addition, I do not stipulate how low is low; similar to Google/GOOG, the correction could be shallow in price but lengthy in time rather than a deep price decline but little time. In fact, this blog entry should be read as a perception of risk and a call for portfolio management rather than a prediction. (I do not make predictions.) And, of course, there always are exceptions to a rocky period in the general market. Leaning into the probable headwind are Cameco/CCJ and Denison Mines/DNMIF, and of course Apple/AAPL, each beginning to emerge from a large intermediate term base.
Comments? Questions?
Why did you purchase what you did? Why didn't you purchases what you should have? Why did you wait to purchase? Why did you wait to sell? Why do you own what you do? What will you do in the event of a sell-off? What will you do in the event of a rise?
During the early-morning chaos of 7 July, I counselled that the market would "reverse up from intra-day lows, rally for approximately the following two weeks, and then..." Well, this is precisely what has occurred; now the two weeks of rally also have expired. We now enter the "and then..." portion of the 'prediction' that so far has followed the script to the letter. As the timer runs out on the short term rally, so do the seasonal patterns conspire against the market's intermediate term direction.
If you typically do not know the reason you purchased and hold an investment, now would be a fine time to know. (No need to feel alone either, as most investors do not know; most simply purchase intra-day volatility.) I receive an increasing number of emails from readers who did purchase Google/GOOG, but waited until the price reached $300/share. At least the decision to purchase was made, no matter how late or high. Most investors, despite my hectoring, have been utterly unable to act at any price. Nonetheless, you should discern your rationale for owning the shares -- especially if the market and Google/GOOG decline in price, or face the consequences of selling at the intermediate term low when the pain of the decline finally becomes too great to bear.
So yes, know thyself. Because knowing all the technical and fundamental analysis gobbledygook is of no help when your emotion-based decisions cause you to buy and sell at horrid prices.
The handwriting is on the wall for a general market decline, or so it appears to me. Mene, mene, tekel, upharsin. Individual securities likely will suffer; some more than others, some less, but likely most. Yes, including Google/GOOG. (To be clear: this does not mean that I suddenly am a bear on Google/GOOG. Merely that I recognize that stocks oscillate within their continuum. A decline in Google/GOOG likely will be shallow in price and brief in time, and could itself suddenly abort due to an event such as being added to the SnP index...)
The market's rapidly changing dynamic does not mean it must decline -- or even should near term. In addition, I do not stipulate how low is low; similar to Google/GOOG, the correction could be shallow in price but lengthy in time rather than a deep price decline but little time. In fact, this blog entry should be read as a perception of risk and a call for portfolio management rather than a prediction. (I do not make predictions.) And, of course, there always are exceptions to a rocky period in the general market. Leaning into the probable headwind are Cameco/CCJ and Denison Mines/DNMIF, and of course Apple/AAPL, each beginning to emerge from a large intermediate term base.
Comments? Questions?
posted by David M Gordon | 6:39 PM
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