Have Faith In Yourself

Jul 31st, 2009 – Comment

If the markets were unrealistically high last fall before they crashed and everything was over inflated, then why are they going up so fast again?


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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faithLou,

If the markets were unrealistically high last fall before they crashed and everything was over inflated, then why are they going up so fast again?

Should we not be happy with any small gain or loss everyday and should we not be worried about large jumps in the TSX over “better” then expected job losses (weird) or better than expected company losses (again weird).

I have to say the markets and how they operate really baffle me and I am starting to lose faith in them and am looking for other ways to invest my money. What’s your take – do you feel the system is somehow broken at all?

Charlie

Hi Charlie,

Great question!

The key to success in asset management is the ability to make decisions. My good friend Steve Kalil taught me that there is no good news, there is no bad news, there’s just news. What are you going to do about it?

tsx

The chart for the S&P TSX Composite illustrates the fact that there were a series of opportunities to make decisions to preserve capital or grow capital. The markets will not make decisions for you Charlie, you have to make them for yourself.

What the market will do is generate signals that indicate, but don’t guarantee, market direction. The trend is your friend till it ends! You have to have a good handle on market direction to make decisions on when to get on and off the ride.

I also want you to realize that the markets are a gauge of sentiment. When the markets are going up it is a signal that sentiment is positive, when they are falling the sentiment is negative. Here’s what I want you to keep in mind. It is never as good as it seems and its never as bad as it seems.

Here’s what I have learned since I bought my first stocks at age 11. There are times to be in stocks, there are times to be in cash, there are times to be in gold, there are times to be in real estate, there are times to be in technology. In general there are times to be in the asset class that is moving in the direction you are investing in.

When you talk about faith Charlie I want you to have faith in yourself! You can enhance your faith in yourself by taking advantage of opportunities to grow your investment knowledge.

On September 26, 2009 The Montreal Exchange will be hosting a full day conference  in Toronto on Options Strategies. Experts in the field will be educating interested investors . For $30 you get access to new ideas and expertise and they will include breakfast and lunch. If any of our readers is interested send me an email and I will wire you up to the details.

You might be thinking that you aren’t interested in options, but my point is that the capital markets provide an endless stream of opportunities to improve your investment knowledge. Take advantage of these offers!

Happy Capitalism!

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