Simple Philosophy for Buying and Selling

by FI Fighter on June 12, 2018

in Investing, Speculating

Some people take a lot of pride in being contrarians… Others won’t invest a single $ unless the masses and mainstream media are all up on an investment and shilling the crap out of it…

I really don’t care either way, I just want to look for deals… wherever they are.

But in general, in the Game of Speculation, here’s a some basic guidelines I like to use when shopping:

  • When you feel scared shitless and everyone around you is clamoring that “the sky is falling“, it’s usually a good time to start nibbling… buying in tranches (into immense weakness).
  • When you feel like a fucking genius and think you are the greatest thing since sliced bread, it’s usually a good time to start trimming… selling in tranches (into immense strength).

Yes, oftentimes, the above rule-of-thumbs will be practiced with individual stocks/investments, but I think it’s also so important not to look at things from too myopic a lens…

Take a step back… and look at the macro view… It’s your compass…

  • If an entire asset class (that isn’t going the way of the dodo bird) is crashing and burning, you should be able to contain your FEAR… The better the underlying fundamentals of the ENTIRE asset class are, the more cool, calm, and collected you should be able to convince yourself to feel. Buying, then, should be a whole lot easier to do…
  • If an entire asset class (don’t care if it is a dodo bird or not) is soaring to the moon and everyone around you is screaming about lambos, you should do everything possible to smash your GREED. Be humble, count your blessings, thank your lucky stars, and ignore all the insane FOMO rush stampeding in from the masses… Selling, then, should be a whole lot easier to do…

When something is tanking, you have to consider the overall asset class and sector, because it is indeed dangerous trying to “catch a falling knife.” For example, if an individual stock is cratering through the floor but the rest of the sector is neutral/flat or rising to new heights, holy fack, that’s a major RED FLAG and CLEAR INDICATOR to proceed with caution…

However, on the flipside, when something is BRIMMING full steam ahead, it really doesn’t matter at all what the asset class and overall sector are doing… Selling high means you’re raking in the dough, regardless, and that’s all that matters in this game!

Anyway…

 

Nobody has a crystal ball…

It’s impossible to perfectly catch market tops and bottoms…

Investing/speculating isn’t easy at all…

 

But I think by following some basic guidelines, we can try and help position ourselves a lot better to achieve success in our endeavors.

 

Buy low and sell high.

 

All the best!

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{ 2 comments… read them below or add one }

1 KevinNo Gravatar June 13, 2018 at 3:36 am

<—When lambo?
<—When soup kitchen?

Reply

2 FI FighterNo Gravatar June 13, 2018 at 11:34 pm

Kevin,

Hang in there bud. When the market turns 🙂

Cheers!

Reply

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