Summary: Just avoid everything in this 2-minute article and you’ll be okay
10 signs you should not be allowed anywhere near your own money
10: You celebrate high prices, despite not being fully invested or at all close to net selling for retirement/consumption, and detest low prices (investment opportunities) under the same circumstances
9: You welcome every acquisition your holdings make, while ignoring historical facts about value destructive take-overs, re-alignment costs, incompatibility etc.
If acquisitions are as good as printing money why don’t you do one yourself?
8: You listen to company management and brokers. You base your positive feelings for a stock on broker comments and descriptive company comments, as if they had any reason whatsover to be anything but über bullish.
“We had a great quarter”
“The company says it had a good quarter and we agree. You should buy some more”
7: You always take positive qualitative statements at (at least) face value, but exclude negative reported and audited facts and numbers as one-offs or plain irrelevant.
“But, the company said 7 orders was a good number”
6: You fail to imagine the range of probable outcomes and focus only on the average (or blue-sky scenario)
5: You talk about single year key ratios (as if next year’s P/E ratio meant something, and as if you understood their implications and demands on the future 25-50 years)
4: You scream of joy when one investor buys shares from another in “your” company (in a bull market everybody buys, you should focus on why the incumbent/informed seller sells in a bull market)
Why does the most informed owner sell in a bull market?
3: You use the present tense (implying you know the next move) when describing price changes: “prices are moving up/down”, rather than past tense “prices have moved up/down”
2: You think “a positive story” is all a stock needs to claim a higher price, irrespective of its starting price.
“But, but, but, solar energy is the future”,
“But, but, but 3D printing… everything will be made through additive processes”,
“But, but, but biometrics is the future”
The but(t) of the joke is you
AND THE NUMBER ONE PROOF YOU ARE A STOCK MARKET IMBECIL…
1. You think you are a long-term fundamental investor (when in fact you only follow trends and tips), and downturn dynamics don’t apply to you
BONUS FOR ABSOLUTE INVESTOR MORONS:
You use leverage, despite being a certified stock market crash test dummy
You apply quantum mechanics principles; you think a stock will appreciate because you are looking at it, because you are reading its news
You’ve never experienced a market crash, despite a third one in just 15 years is in the making as we speak
Closing words: Yes, I think we have the stock market peak behind us. Yes, I am personally basically 100% short the Swedish stock market. Yes, I plan to accumulate long positions in select stocks all the way down as soon as they become reasonably priced (some already are, but probably will go even lower anyway). Yes, I own a fair bit of gold too. No, I don’t have any oil currently, but I’m looking to buy on dips.
Don’t try this (copying me) at home. Disclaimer.