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Tackle Today: ⚠️ Do not follow the Pied Piper of Hamelin

November 12, 2019

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Tackle Today: ⚠️ Do not follow the Pied Piper of Hamelin (Image: Litho Gruss aus Hameln, 1902 - Source Wikimedia Commons)
Litho “Gruss aus Hameln”, 1902. Source: Wikimedia Commons.

« He is still playing his tune. »

“Enter through the narrow gate. For wide is the gate and broad is the way that leads to destruction, and many enter through it. But small is the gate and narrow the way that leads to life, and only a few find it.”

Matthew 7:13 —

The next killing system.
The next money-maker algorithm.
The magic robo advisor.
The next hot tip.
That perfect mutual fund with the lowest volatility possible.
The “20 stocks that could double your money in 2020” list.

The problem we traders and investors face every single day is that darkness does not require energy to settle in while light does. Greed is intuitive. FOMO too. Financial education is not.

That is why the battle against financial illiteracy is one of the most difficult there is in the realms of knowledge mainly because of its counterintuitivity. How hard is it to fight greed, fear, hope, and our eternal tendency for procrastination?

That magical tune keeps playing in the back of our heads every time we feel attracted to enter through the wide gate. It grabs us by the guts. Once the guts are caught, the brain will perish before we notice.

The opposite approach should be adopted, then: reinforce the brain so the guts don’t guide our actions. Reasoning before emotion. We are not buying clothes in a store but building wealth. Read a lot, educate yourself, adopt a system.

The tune the Pied Pier plays is sweet though his goal is to lure incautious traders only to further drown them into the river.


Chart of the Day

Number of mutual funds in the U.S. (1997-2018)

Number of mutual funds in the U.S. (1997-2018) - Source: statista.com

According to statista.com, in 2018, there were 9,599 mutual funds in the United States. While there was a slight decrease after the Financial Crisis, the number of these funds increased during the recovery.

The Pied Piper of Hamelin is still playing his magical tune.


Video of the day

How To Estimate Reward to Risk Ratio

In this video, we will show you how to use a simple tool that will automatically do the math for you and help you make better trading plans quickly.


Today’s line up

Tales of a Technician

Is the Tail Wagging Your Dog?

Sometimes I know exactly how I feel about a topic. The die is cast before I sit down to share it with others. Ask me to pen a piece on iron condors, and I know the blueprint before I begin. Other times I haven’t entirely thought through where I stand on a concept. Today is one of those instances. I’m writing to discover how I feel.

Traders Lounge 11 PM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

The Coaches Show 8:30 PM EST

This is our weekly MasterMind group. Join the coaches tonight, 8:30pm EST to discuss the markets and help you prepare for the week.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.


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