Hindsight will only tell if the bottom was in June for the major index’s. If we look at the technical picture, it shows on a weekly basis that this may have some legs as the MACD crosses up on a weekly basis. Below, I noted the previous times this has happened on the markets.
We can see that the only two times this did not turn to be a major bottom was in April 2001 and April 2008. Basically, as long as our financial system doesn’t collapse, we should be good on a go forward basis.
I Wanted to Write a Short Memo to Subscribers
Over the past few months, it has not been easy but if you’re still here. You are the real deal. I will see you around here for the next 5, 10, 15, 20 years because all of you have what it takes no matter how new you are.
During this time, the BluSuit community has grown to nearly 2000 and it has been difficult for many content creators the past few months. I didn’t expect to grow much in 2022 because I knew that it not necessarily fun to say, “hey guys, buy the dip” when the market keeps dipping. It truly is an emotional experience.
I Want to Say Thank You all for Supporting this Newsletter
Moving forward, the noise will begin to shift in the markets. In this case, it will begin to sound a lot like “buy”, “buy”, “buy” as FOMO on the bottom begins setting in. Many shorts and bears who sold the past few months will be looking to get back in if the market rally continues.
Although this sounds like a good problem to have, it often is not. See, the problem changes and the problem is always fear. In this case, it will be the fear of missing out on every stock that is moving 20%+. It will change investors into traders, causing them to make mistakes like:
Taking out margin to buy stocks with money you don’t have
Call options on stocks that have already run up
CHASING STOCKS that ran up 20% in one day (I am thinking about NET 0.00%↑ after hours)
The Biggest Risk we have in the Markets is Often Ourselves
Controlling emotions on both the up side and the down side is paramount to long term survival in the markets. We need to either have a solid trading process or we need to be willing to hold the businesses we buy during down turns, while doubling down on our bets, if the business thesis is still in tact.
I Leave You With One Piece of Advice
Trader or investor, retail or institutional, don’t let your emotions make your decisions. It’s ok to not catch every boat that leaves a port. Often times, if you are holding good businesses the stock price will out perform over the long run even if it doesn’t run 20% in one day. Don’t be distracted, it’s often too late by the time you notice what happened.
It is the compounding of good decision making over time that truly leads to Alpha.
Stay Tuned, Stay Classy
Dillon
Solid words, brother! Keep up the good work. It's been a rough year, but hopefully we start seeing some success finally come our way. It will be well deserved!
Hi Dillon, if I'm right, you do not talk about MDB. From a technically point of view, I used it for the first time 3 years ago and immediately saw the potential. Really a game changer compared to relational databases, meanly for handling of unstructured data. At that time, didn't fit some requirements, e.g. some transactional aspects, may be due to our inexperience in that environment. If I'm right, the idea should fit very well with messaging platforms like CFLT. In fact, on their internet sites, they reference each others as partnership. An interesting aspect to keep an eye on...