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"How to Arouse Your Profit-Making Senses"
by Frank J. Sherosky
Caveats exist with financial outsourcing, contrary to these many sales ploys. By every rational count, we are supposed to know better and thereby in charge of our own wealth at all times. Misplacing trust there can be as financially fatal, if not more than personal misjudgments. Witness the holders of Enron stock who were lied to unto the very end. Even following the so-called, safe, undervalued selections of the many acclaimed professionals, for example, does not guarantee a profit let alone consistency over the long run. It’s even written in their fine print. Simply witness the record whereby 80-90% of fund managers seldom beat the S&P 500.
It’s no wonder, then, that brokerage advice hasn’t faired much better either. Touting their own analysts’ picks with the fervor of snake-oil salesmen, they seldom give an actual sell direction to their clients until it’s usually too late. Another case in point is e-Toys. A sell direction there was never given until its price dropped below $2 from over $70; and, by the way, was later delisted
The general market, on the other hand, is no respecter of personal stock selections either. When it acts with bearish tendencies despite good news, all bets can especially be off. Regardless of fundamental value, the best of the best stocks can go down literally with the rest. That explains why purchasing pseudo right stocks at the wrong time can still erode capital.
So, what should you do? Should you solely trust the buy-and-hold mantra of the so-called professionals? Or should you go it alone, trusting your own judgments? If so, how would you develop a mindset and a method that avails the best of all there is to know in this arena we call “the market”?
The Message of Years of Research
It’s one thing to recognize the difference between assets and liabilities. It’s quite another to be astute enough to know where and when to trade them. There are factors beyond the strict asset-liability definition that is just as important and further requires your full attention.
The behavior of crowds and its effects is a case in point that confirms economics and its markets as indeterminate issues. That explains why all of us, esteemed professionals and novices alike, are still in some state of constant search for some grail that will enable us to deal with them sufficiently to make us rich.
Economics and finance, on the other hand, are also adaptive systems by nature. That explains why speculating their derivatives, the markets, is so difficult to predict. There’s so much adapting and morphing going on that it appears that the only way to respond to them is to somehow become adaptive along with them. After all, the only true constant is their element of uncertainty.
The ability to recognize and adjust the self, though, just may be the key to that grail, if not the grail itself, which allows us to engage that uncertainty. Therefore,my goal here is to inspire a simple realization that a market edge is possible within you. If you address the uncertain nature of the markets, the importance of your internal character, and the awakening of your speculative perspective, your edge will be sharp.
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