As I peruse through many of the early FI blogs across the blogosphere, I am somewhat struck to see the number of sell orders that have started to pop up. In years past, most everyone was aggressively hitting the “BUY MOAR!” button, enjoying this wonderful bull market that first took flight in 2009.
Well, as fun as the ride has been, in life, as we all know, “All good things must come to an end…”
I’m sorry aging old bull market buddy, but you are now operating in your twilight days and most everyone out there is starting to come around and make the same realization…
But what surprises me (somewhat) is that when I’m reading through the comments section of many of these blogs, people are saying ridiculous things such as the following:
- “You’re making the biggest mistake of your life!”
- “You’ll regret this decision, I’m sure of it!”
- “Bold, bold, bold move!”
- “You’re getting way too emotional and overreacting!”
I’ve got to admit, reading those type of comments can’t help but make me chuckle…
Are people seriously delusional, or what?
Anyone selling general equities, bonds, and real estate today is exiting off the stage and booking profits at record high prices and valuations!!!
If anything, these sellers should be commended for a job well done! Wow, you were able to “buy low and sell high!”
- Fuckin’ A!
- What a g!
- You’re a stud!
Well, those are the type of comments that I hear in my head when I’m first reading through many of these posts…
Anyway, you know we live in a crazy world when selling assets at market tops makes you a black sheep and contrarian…
Just look around you and try and make sense of the world we currently live in right now:
- Zero Interest Rate Policy (ZIRP) going on for a good decade…
- Negative Interest Rate Policy (NIRP) spreading like the plague worldwide…
- Investors buying bonds for appreciation and purchasing stocks for income (that’s so ass backwards! Seriously, spend even just ONE minute thinking this through…).
- S&P 500, Dow Jones, Nasdaq, all hitting record highs!
- Prime real estate across the globe in super-bubble territory!
- Bonds trading in super-duper-bubble territory!
All this while global economic growth has grinded to a halt… Wages are down, earnings are declining, and Main Street is suffering mightily while Wall Street keeps prospering more and and more and more…
This will not end well… It never does…
When it comes to investing, you will fail NOT because of:
- Lack of motivation.
- Lack of passion.
- Inability to save aggressively.
No, you will fail because of:
- Being too motivated.
- Having too much passion.
- Investing like clockwork (rain or shine… even too much shine!).
- Investing way too aggressively.
- Far too much interest.
Over the years, I’ve observed the thoughts/actions of many, many, many investors (including myself)… What I have found is this —
Investing is a drug… No scratch that… Investing is the ultimate drug!
The lust for greed will damage you far greater than any drug ever could…
When people start making money (even just morsels), they don’t ever want to fuckin stop… Their brains buy into the
belief facade that incremental progress is somehow the path to financial freedom… These investors forget that markets behave like sine waves (over the long-term), and go both up AND down.
Nope, when you’re on drugs, you start believing in some crazy ass shit…
- Straight-line perpetual growth!
- Buying aggressively at market highs is the prudent thing to do!
- Selling at market tops is BOLD AND RECKLESS!
- Risk vs. Reward… Who needs to worry about that crap? The only risk is in NOT buying and siting on the sidelines like a loser!
- I’m not only indestructible but an investing genius!!!
At market tops, fear is considered contrarian while greed permeates and is the default action of most investors.
At market bottoms, greed is considered contrarian while fear permeates and is the default action of most investors.
Think about it…
Anyway, at this point I know that I sound like a broken record, so I’ll just leave you with the following comment that I’ve been plastering across the web this past week (I network with lots of investors).
It is 10x more difficult to buy at market bottoms for experienced investors and at least 1000x more difficult for new investors. What this means is that the opportunities that present themselves during the Depths of Despair are truly “life changing”. You can make $1 million+ in ONE cycle! If you have to look for “needle in the haystack” type of deals, it’s just not worth doing… Too much work for too little reward. Patience and doing NOTHING is what trips up most investors b/c if you’re too active, at market bottoms even if you want to buy, you have no cash!
Well, I know that I have no street cred, but Warren Buffett sure does:
“Be fearful when others are greedy, be greedy when others are fearful.”
Everyone knows it… How many investors actually practice it?
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