Friday, November 26, 2010

Contrary Opinion and the Fisherman

Yesterday morning, I took a stroll along the water's edge in La Jolla. Every now and then, I would take a break and read a few passages from Market Wizards for inspiration. Market Wizards is a summary of interviews with top traders. The interviews are very rich portrayals of how a few traders made it to the top. Interestingly enough, attitude and discipline seemed more important then whether the individual was a fundamentalist or a technical analyst.

While resting on a bench, a gentleman walked up to me and said in jest, "Are you enjoying your front yard?" I replied, "Simply splendid." He asked me about the book that I was reading. I gave a short overview of the book's premise; i.e. to share the life stories and winning traits of top investors and traders.

"What main lessons did you take away from the book," he asked? I was intrigued by his question. It showed interest and curiosity and, possibly, experience with investing.

Because I have read the book countless times over the years, I quickly rattled off three key points: (1) The trend is your friend, (2)You have to be greedy when others are fearful and fearful when others are greedy, (3) Always have the patience to wait for a clearly defined situation.

To my delight, he replied that he was an investor. He had recently invested in a coal mining stock and another stock that produced good dividends. (As you know by now, I do not think it is a good time to be in stocks but I kept my thoughts to myself.) He seemed joyful on Thanksgiving morning. He talked about how he was anticipating a Santa Claus rally into the year's end. He said that "those boys on Wall Street want their year end bonuses. And you know that Goldman Sachs is crooked." I saw his point but, more importantly, I sized him up as the man on the street giving me a honest feel for street sentiment. And his sentiment was strongly bullish yesterday morning.

He volunteered that he was a fisherman up North. He caught wonderful salmon and would gladly share a catch with me if I were interested in the future. I thanked him and gave him my business card.

And as the Bullish fisherman walked away, I felt reassured in my Bearish position.

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1. This blog is for educational purposes only.
2. None of the individuals associated with the Las Vegas TSP Investment Club are registered financial advisors.
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