It’s not all that difficult, once you’ve opened your eyes to the obvious trends.
Observe the losing areas of the market for 2024.
Imagine being focused in just those sectors, areas of the market which did fine towards the end of 2023. As a matter of fact, those are the areas of the market that people made most money in. If you’re gonna trade, you have to be amenable to change, able to bend in order to avoid breaking.
Acknowledging the following trends is important, so shut up.
Median Returns YTD
All stocks: -2.8%
Market caps under $250m: -10.4%
Under $1b: -7.4%
Market caps $1-10b: -3.2%
$10-50b: -0.2%
$50-100b: +2.2%
Over $100b: +3.3%
The FAG 10: +10.4%
Now I know what you’re thinking because many of you grew up poor like me. You’re thinking “AHA — the trends are about to change and I’m gonna catch it before no one else does — because I’m a special boy and deserving of being right and rich.”
WRONG.
In real life the underdogs lose and the winners have already been chosen — the rest attempt to claw and fight for the scraps. Mentally, you need to accept this as the norm and embrace the people that you hate, like Mark Zuckerberg, in order to succeed in trading. If you commingle your feelings — you will fail — lest you’re entirely blue pilled and enjoy the globohomo.
The market is the composite of all human knowledge, constituting the thinkers and the morons. The easiest way to make money in it is by simply adhering to what is working and sticking with it.
Buy high market cap stocks that are technically strong, when in an up channel. If risk expands to other areas of the tape, assess it and allocate to it. It’s wrong to constantly attempt to anticipate a pivot, especially with the majority of your assets.
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