I prefer slow and steady


I once dated a guy who was a sweetheart — until he sat down in his recliner to watch a football game. It would start off calm enough, until he began assuming the louder he yelled-out plays at the TV set, the greater the chance the players could actually hear him at Gillette Stadium.
I found it all a bit odd, until I found myself doing a similar thing yesterday afternoon while flipping channels and hearing one so-called expert after another look straight into the camera and pretend they had some great wisdom to espouse to the masses on how the market would be trading after the president was scheduled to give his speech…. and after the Congress passed the stimulus plan… and so forth.
I found myself shaking my head, saying “you idiot, you know nothing” and flipping the channel again.
Many had that pathetic glean one sees while walking through a casino where people deposit coin after coin at the one-armed bandits, always thinking they’re going to get lucky on the next one, and then feeling they’ve sunk too much into it, that they fear if they walk away someone else will come along and hit the jackpot at their machine. Now, I’ll admit that in the less than five times I’ve ever been to a casino I’ve played the slots, but I’ve never lost more than $20 in one, because I don’t like games of chance — I prefer wise, calculated investment decisions.
But these TV drones were going on and on about how the financials, such as Bank of America, were seeing their stocks soar in anticipation of another bailout for the financials.
They may be right — but trading on a would-coulda-shoulda emotional sentiment — isn’t for me. The fact is, when you see such spikes in a stock, you need to be aware of one thing — people are trading on the company — and it’s likely most are not investing in it. That means, as quickly as many jump in on an emotion, they could just as swiftly jump out — and leave the innocent investor trying to ride their coattails taking a big, fat hit.
The advice here — if you choose to jump in on these companies — know you’re playing with a lot of professional traders — many may be trading options  — so monitor your money very, very closely.
If — and only if — I was to pick a play on financials during the stimulus talk this week, I’d be more apt to “bank on” Morgan Stanley or Goldman Sachs, as I prefer the slow and steady incremental rises I see there, without the nonsensical emotional trading. Plus, I prefer the options puts and calls on these names.
But I’ve said it before — and I’m saying it again — only invest during these tumultuous times in companies you’ve done a great deal of due diligence on — as I still have my eye more focused on the second half of the year.
Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here. Do your own due diligence, or at least enough research to pick the right professional to do it for you.

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