Stock Exchange: Intuition Or Intu Wishing?

Jeff: Joining me on the Stock Exchange is my colleague Todd E. Hurlbut, CMT, Chief Investment Officer at Incline Investment Advisors, LLC. Todd is the creator of the Emerald Bay model featured in this column. He is known as “Trending Todd.” And yes, that is a hint about his trading style.

Summary

We want to be right most if not all the time. Our egos are tied into how we are perceived by others. Investing and trading can be a humbling business because what we expect to happen, no what we “know” will happen, often does not. The reality, however, is that nobody has a crystal ball. Nobody on CNBC is more clairvoyant that anyone on Bloomberg or anyone watching at home for that matter. Fortunately, successful investing doesn’t require us to be right all the time but instead to be able to find a repeatable process compatible with our personality. While intuition comes with experience, wishing something will happen is a dangerous place from which to invest. Holding onto losing positions that you “know” will come back is a difficult position to overcome with rational thought. After all, thinking you “know” what will happen in the future is anything but rational. In Ben Carlson’s article “Bull Markets Last Longer Than You Think”, he discusses the length of bull markets throughout history.

“…what we can learn from history is that bull markets tend to run for much longer than most investors would ever think is possible.”

This is the most disliked bull market in my career, I “knew” it was over in 2015, yet fortunately stuck to a process that keeps me invested despite what I wish would’ve happened at the time.

The Stock Exchange is all about trading. Each week, we do the following:

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