Summary: Just avoid everything in this 2-minute article and you’ll be okay
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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 becauseyou 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.
This post is just a 2-minute comment on the minuscule stock market correction experienced the last few trading days. It’s hardly visible on a 15 year chart, but nevertheless… people are talking about it.
Here I had a nice new post on story stocks lined up, that I had hoped writing and publishing before the market turned down. All short ideas of course.
But now I guess I’ll just have to idly sit by and see all the “10 times Sales or more” and “no profits, please, we are American” stocks predictably crash to the ground during the coming 24 months.
You know which stocks I’m talking about: Tesla, Twitter, Amazon etc.
And then there is Apple (currently 107 USD/share). It’s not actually expensive, not obviously at any rate. Even I got the “right” price to 107 USD in the fall of 2014 (see post here), but I think it will hit a 50 handle before this is over anyway. Today’s dip into the low 90’s was not a one-off, but a signal about underlying weakness and times to come.
The peak is behind us
Yes, I think we have seen the peak of the general market for this time. The risk spirit is gone, the irrational exuberance and the unwavering belief in central bank omnipotence have vanished like so much #¤%&¤ from the “news” anchors at CNBC.
Sure, we might see an intensive bounce and a marginal new high at some point (though I seriously doubt it). There probably is a bit juice left in the narrowest of narrow slices of the market, meaning a select few stocks will continue to show new highs for a while. That could fool some people, for some time, into believing it’s still a bull market. It’s not.
Usually there are dozens of 10-20% bounces at the index level during the 60% ride down (that I think is in the cards). I expect this time to be just as lively. So strap in tightly and try to avoid buying too much too early.
Lots of fun ahead of us
In any case it will be a fun ride, with plenty of historical stupidities said and done by the usual culprits: The Federal Reserve, CNBC, Krugman etc. And then, when it’s all over, the interviews and compilations with Peter Schiff, Jim Chanos, Raoul Pal, Marc Faber… will be nothing short of epic.
Strap in, start researching
So, what should you do?
Start researching your favorite stocks and industries right away to be ready.
Look for sustainable models, sticky products and services, strong balance sheets, good cash flows etc. and decide at what prices they definitely will be good investments.
Then get ready to carefully accumulate shares in those stocks, when they dip below your wish list price (probably 12-24 months from now). Buy slowly on dips during a year or two while ‘your’ stocks bottom out, and then buy some more when they start rising in earnest.
Oh, and then it’s almost 2020 and we can look forward to a fantastic decade of productivity, robotics, genetics, journeys to Mars, and the first general Artificial Intelligence that at all resembles a human mind (very late in the 2020’s).
Please note, that I’m not recommending anything here, nothing at all connected to the real stock market. This is all a fairy tale. See Disclaimer page here.
And, yes, I bought some Brent today. Slowly accumulating. I know you’d ask anyway.
15 minutes: I would be very surprised if this article takes you more than 15 minutes to digest. What you’ll get in return is a new slant on productivity, boombastic jazz, and a kick in the butt regarding your stock market activities. Oh, and some of my pics from Ibiza the last few days.
Okay, linking to a random YouTube clip from my youth might smack more of procrastination than productivity, but consider this advice:
Never put off (just) until tomorrow, what can safely be scheduled for the day after that.
Hmmm, am I getting my message across here? Perhaps not just yet, but believe me that both statements will be tied in very neatly with the main theme of productivity.
I came back yesterday from 10 days of travelling, during which I did exactly zero writing and not significantly more reading – not even fiction. I did alter* my state of consciousness a lot though – not least on Ibiza. How productive was that?
Well, how can this (pic of our Ibiza living room this year) not be productive (=worthwhile)?
*meditating, schmeditating, medicating…
Why strive for being productive?
I constantly get bombarded by questions regarding my activities, now that I don’t have a job. I guess what they are really asking is how I can stand not being productive (which is one of the basic human driving forces, and used to be necessary for survival).
Today, I even found myself thinking in terms of not having been productive for ten days straight. Quite out of character for me to think that way. The second after, however, I immediately started pondering the word productive in itself.
My first thought had centered around not writing, not reading articles, not working out. So wrong.
My second, corrective, thought simply asked the most important question in the world: why?
Purpose is everything, Mr Andersson
It all boils down to the why of things, to the purpose.
Being productive means being both effective and efficient. That, however, does not mean doing what others expect you to do as quickly as possible. It means doing whatever brings you closer to your desired state, in the best way possible (which sometimes is a slower [preparing, meditating] or more roundabout [education, or whoring out] manner).
I read and write because I like it in the present, as well as because it makes me evolve and grow, because it conditions my brain’s plasticity and prepares me for the future. I don’t do it to simply fill my days, or to keep on some arbitrary blog schedule.
Sure, I want to spread my ideas as widely as possible to make the world a better place, but I won’t do it at the cost of my own ultimate goals (don’t ask. No, I mean it; don’t ask).
I urge you to reconsider the definition of “productive” in terms that apply to you specifically:
What is being productive to you?
Is it productive to go to the gym? Why? You want to get stronger? Why? You want to live longer? Why? Sometimes it’s simply more productive in many ways to not go (building motivation, resting strained tissues, prioritizing something else)
Is it productive to train your brain to understand feedback loops, or avoid biases, to know math and languages, to make it more plastic? Why? To get the highest paying job possible? Why? To get the most rewarding job? Why? Is it to never postpone what can be done do right away? Why not? [That’s one tie-in]
Is it productive for you to become smarter? Why? What pleasures will you reach for with your new super smarts?
You want to get richer? Why? Sure, money and time can resolve a lot of issues, just rarely the important ones. What are you going to do with the extra money? Invest to get even richer? D’oh!
You want to become more aware, more mindful? Do you feel behind schedule when you can’t make time for meditating or doing mindfulness exercises? Why? What will you do with your increased sense of unity with the physical world?
The cute path to hell
Oh, make no mistake, I am all for becoming stronger, wiser, smarter, plasticity-er, more aware and mindful. I am acutely aware of my own purpose and the ultimate answer to my own why:s. I just want you to question your own choices along the “cute” path society has made you believe is the only one (also known as Keeping Up With The Joneses = KUWTJ).
Question everything, trust no one
Lesson one is to question the meaning of being productive.
For me it’s sometimes about meeting people, hanging out with friends, kicking back, altering my state of consciousness with alcohol, coffee and other drugs.
At other times, it’s reading fiction, meditating etc.
At yet other times it’s challenging myself, my body, my brain, my fears and insecurities.
Once upon a time, it was about making a pile of money as quickly as possible. Before that, it was all about surviving as comfortably as possible from day to day; about not getting caught naked, not being put on the spot.
Lesson two is about questioning all your power words; realizing your relevant definition is somewhere along a spectrum of possible definitions.
What is being courageous? is it doing something dangerous, something you are afraid of? Not necessarily.
Healthy? Healthy food, lifestyle, workout routine? Is it vegan food only, is it working out every day, is it never indulging in sweets, fat, salt, alcohol?
Discipline. Sometimes it’s about working out despite not feeling it. Sometimes it’s the opposite; being psychologically strong enough to rest the required time, even if you’re lagging
What is your definition of a boombastic jazz style? Mine is this! [Second neat tie-in, although my mind actually goes completely blank when asked what a boombastic jazz style really is]
Stock market implications
Oh, I know it’s all you guys really care about… Getting rich quick schemes, preferably on the stock exchange.
Then, consider this:
If you really want to make money on the stock exchange. If you want to go about it in a productive way. Then why do you assume following charts on your off hours, combined with luck, will make you beat experienced and immensely more connected, rich and powerful individuals and firms?
Why do you take chances? Why do you treat the stock market as a casino with way over 100% payout ratio. Why don’t you heed my advice and invest rather than speculate?
Being productive in investing means investing for the long term. Invest systematically. Invest productively: either in cheap stocks, in your own skills or in a business of your own. See previous articles on investing here on my START page if you haven’t read them already.
On the stock market: What is being productive? What is being courageous? What is being disciplined? What is a boombastic jazz style?
I can tell you what isn’t productive: following the herd, following the trend like a lemming, speculating blindly without putting in the work
I can tell you what isn’t courageous: doing exactly like everybody else
I can tell you what isn’t disciplined or decisive: buying the dips with no plan B, implicitly betting on selling to a bigger fool at just the right time
I can tell you what isn’t boombastic: crying over your losses after the fact; crying that nobody knew what was coming, blaming your broker, blaming analysts, blaming media. No, boombastic is thinking for yourself and taking all the credit and all the losses on the same ego account.
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