Either/Or

“What philosophers say about actuality [Virkelighed] is often just as disappointing as it is when one reads on a sign in a secondhand shop: Pressing Done Here. If a person were to bring his clothes to be pressed, he would be duped, for the sign is merely for sale.”
― Søren Kierkegaard, Either/Or: A Fragment of Life

Andrew Kassen has penned a series of wonderful observations on what appear to be potential changes in market structure, what may be the catalyst and why it feels different this time. There’s profit in reading those post and you should make the time.

As Andrew points out, many traders have been nicked by the recent market action and, just as many, appear to be flummoxed that the signals that they had come to trust over the past year are not working as well now. On the one hand, this could simply be a rotation away from expensive growth stocks and dip buying continues but in different sectors. On the other hand, it may be something entirely different. Knowing, though, is well beyond my pay grade. I venture to say that it’s entirely beyond anyone’s pay grade.

We do know the confusion between being smart and being lucky in markets. My observation is that there are a lot of lucky people proudly selling some sort of “sauce” that they pour liberally on the same food everyone else is eating while giving it some supercilious affectation. The problem, of course, is not that they’re selling it. It’s that they actually believe it’s worth selling. That’s not to say that there aren’t some extremely talented traders running subscription services. There are. There are just a lot fewer of them than most people imagine.

But let’s say, for a moment, that we’re seeing something more than a simple growth/value rotation. What then? Can your $29.95 a month teach you how to right size your risk on the down side or is it just going to put you into naked shorts that can unexpectedly have you getting to know margin clerks?

As I said, I have no idea what is going to happen. I had a great week. Not because I’m so damned smart but because I’m a value investor and the tape paid for value. But it’s hard to change your trading perspective – going from growth to value or long to short. For most people this is very binary. Either you can or you can’t. Either/or. Do you really know? A lot of you will soon find out I think.

 

 

 

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