What to do when everyone around you is losing their head?
June 8, 2010
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If you think long and hard about it – the greatest enemy of the market is rarely ever the market – rather everything centers on basically you! – that’s really the 80% that completes the 20% to give you the 100%.
Granted, it’s pretty hard to stay positive, focused and committed, if everything just seems to spell doom and gloom in flashing neon alphabets.
Fact of the matter is, man is a social animal – that is how we are hardwired, so fear is perfectly natural – don’t fight it, just go with the flow – but if there is anything resembling a solution it has to be found in what I call the perfect killer attitude – firstly, recognize your fear for what it is – I mean don’t confect imaginary bogey’s which have nothing to do with reality – take a long look at it; go around it a few times to size it up; then sit down and list them all out on a piece of paper and ask yourself – how logical is this fear? How does it affect my assumptions? Do I need to tack a different course? If so what’s the pay out? Are there any penalties? Do they square off?
That’s the mistake most people make – they run here and there looking for assurances from newspapers, television anchors and market pundits and the next thing you know they are so confused, disorientated and beaten up that they just take a wrong turn.
Like I said, understand FEAR for what it is; doing that keeps you on an even keel as when most people around you are losing their marbles usually there is plenty of opportunity – that simply means when the person next to you decides to press the chicken button and opt out – you should never ever do something dumb like follow his cue – if you can keep your head when others around you are running around like headless chickens the chances are you will probably never ever fall prey to the herd mentality – then again it could very well mean you will be completely wiped out – the key here as I see it is never to be run over by the stampede and to just stick to the discipline – easier said than done when you consider continuing to buy in when most people are cashing out of the market is a bit like trying to catch a falling knife hardly the stuff of inspirational moments.
That’s why when the market gets this nutty, all I really do is walk around all day, pretend to be really busy and do absolutely nothing – don’t even bother taking my phone and if I can help it the market is really the last thing from my bochap mind.
Works for me, hope it works out for you as well. If it gets really bad and you cannot tahan, look on the bright side, you can always press the chicken button.