How does one bridge the middle overs?
Sure, a blogger who is simultaneously a cricket fan…
…will dish out analogies from cricket… 🙂 … !
We’re in the business of identifying extremes…
…and acting upon such identification.
Whatever is in the middle of these extremes…
…is, for us, an area of…
Do we know how to not act?
There is an impulse for action in all humans.
In these loaded times, this impulse is extreme.
Why do we not want to act when an extreme is not there yet?
During times of complete pessimism, one is able to purchase underlyings for a song.
Similarly, during times of total optimism, one is able to secure good exits for stuff that one wishes to get rid of.
How one behaves in between adds or subtracts significantly to or from one’s market success.
Selling early means lesser profits, and the same goes for buying late.
This is the kind of behavior that lessens our multiple, sometimes greatly.
This kind of behavior would be absolutely ok if one were trading.
We, @ Magic Bull, are in the business of effecting multiples.
Anything coming in the way of that is behavior we wish to avoid.
With markets normally trading between extremes about 95% of the time, this leaves us with a lot of time in which we do not act.
Also, it brings us back to the pivotal question – how do we manage not to act when everything and everyone around us is screaming for action?
We do – everything – else.
Apart form market action, there’s business activity, charity ventures, extra curricular activities, family time, sport, leisure, entertainment … … one’s day is packed.
There are two portions of the day when one is driven to the edge of action, though.
The first is after studying market opening.
This is when one does a half-hour call with one’s broker and just sheer discusses everything one is observing.
Then, as one studies the close, this situation can arise again.
One writes, for example.
Or, annotates charts.
…and demarcates patterns.
There’s no room for strike 3 – one just doesn’t let strike 3 happen.