Everybody always asks me where I think the overall market is headed. Is housing going to crash? When will consumer debt catch up to everyone? Are we headed for a depression, etc..
My answer is: I don’t know and I don’t care!
I am a trader and I hold my positions for a few hours or days. I prefer picking and playing one or two stocks at a time — no diversification for me — much less to worry about, much less risk (and I’ve even moved some cash into gold and euros while sitting on the sidelines). I can make money in up markets (momentum buying) and I can make money in down markets (short selling) and for nearly a decade, so all I need is volatility. Following this strategy, I’ve done this pretty well.
Even though I think playing micro-caps, small-caps and penny stocks has much better odds than Vegas, my market outlook can be compared to a guy who’s gambling inside one of Vegas’ many fine hotels while most people are mistakenly worrying about how the hotel’s revenues and earnings will effect them. I don’t care–I’m not employed by the hotel (similar to people whose income is tied to their business that is tied to the economy), I’m focused on my one game and the hotel’s profitability doesn’t impact me in the least. That’s the beauty of my market niche, while it can be influenced by the overall market, these speculative stocks care much more about hype and manipulation, both of which are rather easy to spot (if you know what to look for) and that’s why I love it!
Right now everyone is warning about oil, credit and housing so yes, I am bearish on the overall stock market, but who knows, the market has held up extremely well so far and those who bet based on their bearish views have gotten crushed over the past few years. I’m just playing my game and my bias is based on price action, not some BullShip wannabe economic expert perspective.
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