To say I fancy myself as someone who puts in the time on research to generate trades and getting the low down would be a massive understatement. Majority of my time spent during the workday and when its is over, I am gazing at charts, data and financial statements. To be successful at trading or investing one needs to be on the pulse of what’s happening. However, sometimes during all this work there is a bifurcation of say fundamentals and reality. Charts, technicals say something, the fundamentals and news say another but the price action also says something. Sometimes it just doesn’t line up.
Over the past 2 years this is a huge trend. A lot of the underlying data and research says one thing about the macro environment or a lot of the high flying stocks but the price action or performance is completely different. This really isn’t any news to people who run money, but the issue here that should be noticed is that certain people get militant over what data they look at. They sit there and defend fundamentals. They preach impending doom and will stand firm to that one data set and completely ignore anything else. They will even fight the tape and price action. The comical part here is these folks usually don’t run or manage money. They are paid to weigh in or analyze. If they had to actually run money they could never behave like this. Therefore throw whatever it is they say out the window because there is no money where their mouth is.
The important part is when it comes to making money or putting a position on follow the action. There is no glory in being “pure” to the data. Massive amounts of wealth can be made trading a move even if the underlying fundamentals are bogus. People are irrational thus prices will not always be rational. Have a plan when to get out and never be greedy. Bulls make money, bears make money, and pigs get slaughtered. Also, don’t be a bitch about it because sheep get slaughtered too. Do your homework or don’t even show up.
These annoying people are always complainers. They have the nerve to complain that the market or price action isn’t matching what their data or research says. They cry foul or call it ridiculous because the fundamentals say so. I guess they never heard the phrase money talks. I have no problem with you crying while us cavaliers go out and make a buck because we aren’t full of hubris.
It’s just simple and kind of cliché but the trend really is your friend. Don’t ever fight the tape. Market forces are like a psychopath on a meth bender. You don’t want to get in the way of that or take it head on. That is just not going to end up good.