Here I am spending a thousand dollars per day, everyday, for the unforeseeable future, all the while some poor schlepp born into some obscure town in 0hio dies from starvation because all of the blue collared jobs have been sent abroad. Am I to feel guilty because my deck has been stacked into my favour? If so, do I deserve this minour success because my Father and Grandfather worked liked dogs, and died poor, just to put food on my table?
The truth is, life is random. Nothing is destined to be and everything is organized chaos. The same rules apply to the stock market. Why did APKT blast off two days ago, yet trade lower yesterday? YELP traded lower 9 consecutive days ahead of their lock-up period expiration and then positively annihilated short sellers on expiration day to the tune of +22%.
Tomorrow the Fed will reveal their plans and the market is going to respond. It is entirely possible the market will trade down or up, no matter what. If the Fed says no, markets may bounce because the Fed “may do QE later.” Or, the markets may trade lower on the announcement of QE because “the news is baked in and the Fed is acknowledging a structural problem with the US economy.”
The true value of a company can never be determined over a short period of time, same goes for the overall market. Just because the market sold off today doesn’t mean the bull run is over. Furthermore, in the event we trade +300 tomorrow, that will not guarantee higher prices one month from now.
As investors, we need to have convictions. Lukewarm doesn’t pay the bills. If you lack the backbone to bet big when it matters, you will never amount to anything in this business. Having said that, the POMO perversion does not appeal to me because of the headline risk aspect. Because of that, I’ve been forced to suspend core thesis trades in exchange for pussified neutrality. In the not so distant future, I will, once again, allocate resources into companies that I find to be inexpensive.
Once the fucking Bearded Clam is out of the way, I will be swinging clawhammers and heavy battle axes, randomly, at homeless men in wheeled chairs–adjacent to idle manholes.