Tuesday, September 22, 2009

FEAR...loathing...and window dressing...

I get asked all the time what clients should do when they have a nice fat profit. Should they just sell and take the monster ka-chingos, or should they sell partial, or should they sell none of it and keep riding.

My answer is #1 I can't answer what you should do, I can only say what I would and have done. And, that's all of the above depending on the situation, but my pat answer would almost always be -

1)Make sure you book some profits as the trade goes your way.
2)Let your profits run, while trailing with stops so that if it reverses you don't get killed on a trade you should have ROCKED on!
3)Most of all be proactive, don't just sit there and sway in the breeze, make sure you protect profits and if you see them falter take decisive and quick action. Don't let a small problem become a big one.

I've been thinking alot lately about the bigger picture and I've come to the conclusion that this is a microcosm of the world, or more perhaps OUR world (US of A).

What seems obvious to me isn't always obvious to someone else until/unless they get hit over the head, or lose too much being stubborn.

See, thing is, I get pissed off every time I go to a sports game (Mets/Nets/Jets) and the "security" barely pats me or anyone else down. I get pissed off when the airplanes don't search people before they get into the terminal. And, I get mad when just about anyone can come into the schoolyard where my daughters go to school.

Why are people allowed to do this? It's simple, we have become a fast food nation where we can sit back and relax and we don't seem to think it worthwhile to do anything until after the fact. I remember this block by my house when I was growing up and EVERYONE, including the police, knew that it was a very dangerous block and that traffic didn't stop sometimes when kids crossed and that sooner or later someone was going to get killed...and that's what did happen. I don't recall the whole event, but I remember a little girl getting run over and killed and THEN the city put in a stop sign. And, I remember back then thinking "Why didn't they put that stop sign in BEFORE that little girl was killed." We should be more proactive, at some point does anyone doubt there will be another terrorist attack, or two, or 10? And, that's why I hate not being searched.

And, so you say "Waxie, what does this have to do with the stock market?" Well, like I said, its a mircrocosm of market psychology, and vice versa. In the market it's better to take some profits then it is to try to catch tops. Then you are a mere mortal and no longer a G-d.

Be proactive, I've said this here before, it would be great if our leaders had VISION and could plan for the inevitable dangers before they happened. Same can and I am saying about the market. We very well should see 10k this week but I'm not sure beyond that, I just know that right now the complacency meter is off the charts. Everyone thinks the market is just going to keep going, and hey, it may, but I prefer to trade a tad tighter and if I miss a move, I miss a move.

Another saying for clients "Don't be in such a rush to lose your money!" VISION folks, VISION. And, yeah, I think you should write to your congressman or woman and tell them to get proactive.



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