Sunday Musings: Emotions

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The task seemed simple enough and not much different than usual. Write another blog post just as I have done some 900 times over the past 2-1/2 years.

Share investment experiences that others can benefit from on their way to becoming better investors. The topic last week was “Emotional Aspects of Investing,” that attempted to answer a reader question.

Somehow the entire article caused more emotions in readers than I’ve seen in a while followed by appropriate responses; in part negative. If you haven’t read the comments, you may want to do so.

Writing a blog such as this one is nothing but a labor of love based on my need to attempt to make the investment world a better place. There is so much bad information being published that I feel like the lone ranger expressing viewpoints that do not align with main stream thinking.

I enjoy the interaction with readers along with questions and suggestions. My answers will always be straight, to the point and exempt from political correctness.

From the feedback I have received via emails, it is satisfying to know that my thinking has helped thousands of investors. However, no matter what I do, there will always be some whiners and complainers; fortunately, they amount to a small minority of less than 1%. I don’t take their comments personally, but attribute them to other troubles in their lives.

One reader summed up the comments perfectly when he said:

Well it seems the free-loading deadbeats such as myself gave you a thorough tongue lashing as some of them may have had to dip into their pocketbook a little. Did they really think cause this approach is free it is a perfect guarantee.

You have cautioned reams about entry on a new positive go signal. Looks like the deadbeats used any retort to unload. None of this had to do with your original response. If the folks cant handle a loss in their 5-10-20 year horizon they certainly should not be investing themselves or perhaps in the marketplace at all. Where do people think all the profit in the market comes from anyway?

It’s pretty much a zero sum game so it is the greater fool being clipped and sheared. The 1 or 2% usually charged over 20 years is well spent rather then changing like myself to another method every time a wave comes along.

The initial question was how does one side step emotion if the go signal was close to a “gut feeling” correction? Yours was discipline. And the emotion sometimes is to wait a day or 2. Nothing wrong with that. It doesn’t change a methodology, it confirms one and acknowledges as you said we are all human. If these gents think you have been brash, well…

It was negative week on Wall Street, which seemed to have been reflected in my blog universe. Be that as it may, I will continue the chosen path by trying to provide you with straight talk about investments whenever possible.

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Comments 7

  2. I agree with Tom. It's absolutely bizarre for readers to grouse like this about a free newsletter. They need to get a life.

    However, I would be interested in your more detailed thoughts, if any, about what SK said:

    "I am glad you ask about the last two bear markets. I use a very simple momentum approach to the market trend. I use a very adjustable chart in size both in height and width of the SP500 ($SPX)and Wilshire 5000 ($WLSH) on StockCharts.com as a member.

    "I get in when that 200 day SMA line with the price removed turns up and get out when it turns down, very simple, but chart must be tall and narrow to fine turn the wiggles out.

    "Out in Oct, 2000, in June, 2003, out Feb, 2007 and still out.

    "It doesn't get any simpler than that, but thanks for asking. This also works well with bear funds during the downtrends unlike some other methods that I have experience with."

    I know this is not the same as trend tracking, but I (and perhaps other readers) would be very interested in your thoughts about this strategy and in any explanation of what exactly he is doing, since I don't understand it from his brief account.

    Thanks for all you do, and pay no attention to the whiners.

  4. Ulli,

    We hope all the tongue lashings etc. are over, boy was that a sign of some serious problems at home I would say, who knows?

    I personally had a nice pofit recently and bought SH to hedge me till the market makes up it's mind. That kind of stuff helps me with my emotions unlike that of so many deadbeats have expressed themselves like a child on your nice and helpful blog.

    I believe most of the deadbeats who are writing all the dumb and silly undeserved stuff are a bunch of low self esteem losers who aren't smart enough to say anything positive and probably have no money to invest anyway.

  5. I do appreciate all you do.

    BTW-Al Thomas, in his most recent weekly newspaper column/e mail, is now recommending buying the major indexes when the the 200 day average is moving up REGARDLESS OF WHETHER OR NOT IT HAS PIERCED THE 200 DAY M.A.

    Any thoughts/comments?

  6. Adding to this late….Another (not always silent) but very grateful reader. And for those that cannot take responsibility like an adult for their own investment decisions: "get a life" as has already been said. I've found the free (!) information offered here has been of tremendous benefit ..above any other methods I've seen yet. Thank you Ulli.

    Chris

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