A Quick Review

Simple Thoughts / Large Impacts

Sometimes, the “simple” things are often the most important. Everyone “looks” for the “holy grail.” I just apply the basics. There is no “magic wand” to wave and turn you into the best investor, trader, or hedger you can be. It takes time and practice to achieve your goals, but there are some basics to apply.

From time to time, it’s important to take a back seat to everything that is thrown at you and realize there are some rules and thoughts, when universally applied, make a very large impact on your success. Let’s take a look at a few of them.

Have A Plan

Opportunity knocks. It knocks more often if you have a solid plan. Having a plan is important. Knowing what type of investor, trader, or hedger is equally important, and understanding yourself better allows that to happen. So tell me, what category do you fit into?

Trader-wise, we have a day, scalp, and swing types. People like me are “position” types of investors, traders, and hedgers. It may sound boring, but it works. Regardless of the type of investor or trader you are, it makes a difference in how you ‘plan’ and establish your plan. That’s where you have to start, as this is the only way you can identify, and then take advantage of the opportunities that find you.

Nonetheless, how you answer these questions, making, having, and, above all, sticking to your plan is imperative. Without a plan, you are just “shooting buckshot.” The basic opportunities that arise around you need to fit into your objectives. Without having a plan that differentiates your “objectives” from others, being able to identify, and then act upon the opportunities that abound is ambiguous.

You Are Going To Lose

Funny, when I read what others write, I seldom hear about the losers. Face it, folks, it is a fact that you are going to lose. That is a good thing, as you learn much more from your losers than you do your winners.

So, what can you learn from your losses? To start with, you can learn if your “analysis” was wrong from the start. It happens to the best of us, even me. I remember missing a fact or two that, if I understood better, I never would have acted. It happens every day, even if your plan is flawless. Investors and traders are not perfect. Leave perfection to the “superheroes.” You are human, appreciate that.

Learning how to lose is important as well. Getting out of a bad trade or investment is always better than hoping, wishing, or praying that it turns around. Chances are it will not be best to be out of it sooner rather than later. Let winners run, not your losers. It is also a good idea to learn when to take off some time and step away. If you find that a few transactions did not go as expected, step away from the screen and take a break. You’ll find yourself to be much more refreshed when you get back in the saddle.

Greed Kills

How many times have you entered at the absolute bottom and sold at the top? If you answer that “all of the time,” let me know, and I’ll sell you some beachfront property that’s only underwater half of the day. In my more than half a century of investing and trading, I can count on one hand how often this has happened. All things considered, I was lucky, nothing more, nothing less.

Realize that taking a piece out of the middle is your objective. It sounds easier than it is, but having a plan helps you achieve your goals. When a trade or investment surges, I use trailing stops. Detailing how is a topic I teach and something good long-termers need to learn. Often, the trend will continue, and my trailing stop moves with it. More than likely, at some point, the trend is going to change, and my trailing stop gets hit. I look forward to that as my profit is booked.

If you remember anything, greed kills. Be happy being a winner. There is no reason to be the biggest winner all of the time. You will “never go broke” taking a profit. If you “intend” to be right every time, then chances are you’ll never reach your goals, as this is not realistic. Be happy to be right more than you are wrong, and you let your wins run and cut your losers short. It works.

Paid Post This Weekend

It’s been my pleasure to post here on Substack. The Ticker is about finished morphing into a format that works. I’ve selected a stock that simply fits into most portfolios and structured its acquisition with naked puts and covered calls to put “time on your side.” I’ll review how I’m positioned across the investment spectrum as well. Thanks always for following me. I wish you the best in your investment, trading, and hedging matters.

Now and then, I run across a video from a movie that could not be produced in today’s day and age. In all sincerity, you can take any of Mel Brooks’ films and put them into a category emblematic of this fact. “Blazing Saddles” was undoubtedly one of his best, as was “Young Frankenstein”. Rules are boring, but they must be followed. Movies like these come around once in a lifetime. There is always time to simply step away from your screen and enjoy these scenes. Best always and enjoy.