« The big money is in the waiting. »
Autumn is here and Winter is coming. 2020 United States presidential election too. Moreover, there is this seasonality sell-off component by the end of September that always tests our convictions as traders.
Say you are a full-time trader and an investor. You like to keep some stocks in the portfolio either for capital gains or because of their fundamentals and dividends. Your timeframe is the same as Buffett’s so you will hold them until one or more of the previously cited goodies cease to exist.
Whatever the case, there is a mindset—closely followed by a behavior—that every investor must adopt, which is hibernation.
By definition, hibernation is a state of inactivity and metabolic depression that is common to warm-blooded animals. Once a year, they enter this heterothermic state, characterized by low body temperature, slow heart rate, and low metabolic rate.
Twitter was a dying web creature until Trump appeared on the scene. You can say anything about him but that man right there brought the bluebird back from the deceased.
For the sake of simplicity, let’s say on February 1st, 2016, when presidential primaries started, you bought some shares of the broad indices SPY, DIA, QQQ, and IWM and went on a cryogenic state, only to be wakened up 4 years later. Because you are in a deep state of inducted hibernation you can’t touch any of the shares you hold.
In the last 3 1/2 years, Trump ruled the bluebird and the bluebird ruled the stock market. But you didn’t see anything. Although there are still 4 months of sleeping left, here are the results so far:
- SPY +54.58%
- DIA +64.99%
- QQQ +83.44%
- IWM +50.87%
God bless the hibernation.
“The big money is not in the buying or the selling, but in the waiting.”
Charlie Munger —
Chart of the Day
Kneel before Twitter
Video of the day
UVXY Confession
Today’s line up
Traders Lounge 11 PM EST
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Halftime Report 12:30 PM EST
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