The 7 Deadly Investing Mistakes - THE NEW RULES OF INVESTING SUCCESS
Some of your best instincts may have become your worst enemy
Jon Markman - The rules have changed
You and I have been washed up on a desert island on the far side of a terrible financial storm.
We’ve lost much, but our wits remain sharp and our priorities are now quite clear.
Many of our basic assumptions, however, have been thoroughly shaken. That’s why even experienced investors are continuing to lose money—or leave it on the table—today.
And just about everyone I talk to is still taking way too much risk—especially those who are out of the market.
No Position Is A Position
Not being clear about the overall direction of the market is a cardinal sin right now. Stand in the middle of the road and you will get run over—from both directions.
Cash says: “It’s a bear market, I guess.” If you have a bullish outlook, you need to be seriously long—and stay that way until your outlook changes.
If you have a bearish outlook, get the hell out (yes, including in your IRA!) or go seriously short.
I guarantee that sitting on the fence will dent your tender parts.
ACTION TO TAKE: Here at Trader’s Advantage we are convinced the market could take a shattering drop.
The proof of what I’m saying lies in the credit markets: even as the markets are bubbling up 25%, you can’t give credit away. Credit is a measure of the future and THE FUTURE, as far as bond buyers are concerned, DOESN’T YET EXIST.
Resolve: Make Money In Bears�Dow down 25% December � February, Traders Advantage up�
• Fifth Third Bancorp- 83% PROFIT
• Financial Bear 3x- 42% PROFIT
• Regions Financial- 59% PROFIT
• US Bancorp short- 27% PROFIT
• Honeywell short- 17% PROFIT
�Make Money In Rallies--Dow up 25%, March � April, Trader�s Advantage up�
• Burlington Northern calls- 105% PROFIT
• Luluman Athletic- 42% PROFIT
• Century Aluminum- 54% PROFIT
• Technology Bull 3x- 43% PROFIT
• Goodrich Petroleum- 18% PROFIT
• Terra Industries- 19% PROFIT
• ProShares Ultra QQQ- 37% PROFIT
• AC Moore- 42% PROFIT
A 25% drop between late April to mid-May would take us back to November’s lows and mark the point of maximum despair for all long-term private investors. So shaken will these investors become, they may never, in their lifetimes, return to stocks.
That’s not you, though.
You are going to win, big time, and I am going to show you how.
Let’s say that your outlook is bullish and you get a down day. Add to your position. And the next day is a down day. Add to your position. Continue to add to your position until you hit 50% of the last correction.
Obviously, the reverse is true if you are short.
At this point, you need to consider yourself proved wrong in your outlook and you should cancel your position quickly. Never, ever, hold on to be proved right.
Mistake #3 :Not Understanding This Is The One!
You’ll make real money in two, three, maybe four big trades a year.
Enter each trade with the total confidence of one who believes THIS is the Trade Of The Year. Why else would you put a trade on? You’ve done your homework, you understand what’ll prompt additions, you have your exit plan—what are you doing setting yourself up to clear a measly $2,000?
Mistake #4: Buying Weakness
Never buy low, sell high. This whole “you liked it at $15, you’ll love it at $5” shtick is utter nonsense. If you doubt me, call up a chart of AIG…or GE.
Heroes die young with the words, “Great value!” on their parched lips.
Survivors are like mercenary soldiers, who volunteer for duties on the stronger side. So if you see strength—rising stock prices—sign up!
Think this way every day. Your top priority is the trade that’s working best. Too many people (not just investors) waste their lives “fixing” problems. Problems—and problem stocks—are for ditching. Successes are for nurturing.
Mistake #5: Exiting Early
Some of the best parties you missed are ones you left early because of your babysitter; some of the best concerts you never heard, because while the third encore played, you were beating the crowd out of the parking lot.
And some of the quickest 50% profits you’ll miss are because you got out a week early. That last week will be violent, but that 50% will be sweet reward.
Mistake #6: Not Using Technicals AND Using Fundamentals
Fundamental investors hate technicals, chart traders laugh at investors who rely on fundamentals. Both are stupid. In espionage, you use every piece of intelligence you can lay your hands on. The technical rules are simple. Learn and apply them rigorously. The fundamentals, likewise, are easy enough to uncover. When they agree, you have a Go. No agreement, no go.
The Z Jump
The human brain is uniquely wired to find patterns, predict what’s around the next corner and jump to conclusions. Fact A plus fact B, plus…whoa, you jumped to Z. This is sometimes useful in spouse selection (“love at first sight”), but you will die poor if you trust the Z Jump in the market.
Buy the Drip, Sell the Rip
• Gilead: +111% in 13 days
• Teekay Shipping: +40% in 2 days
• Regions Financial: +59% in 4 days
• InterContinental Exchange: +77% in 18 days
• eBay: +87% in 2 days
• Apple: +50% in 1 day
• Ryder: +86% in 2 days
• Newmont Mining: +65% in 3 weeks
• Fannie Mae: +46% in 1 week
• UltraShort Financials: +21% in 1 week
• Innovo Group, Inc: +25% in 1 week
• Century Aluminum: +54% in 10 days
• Cisco Systems: +26% in 1 week
• AC Moore Arts & Crafts: +42% in 12 days
• MIPS Technology, Inc: +25% in 1 week
My patented forward echo analysis shows you how to “ride the surge,” pluck the profit quickly—and dodge the bullet.
In times like this, you need a system that just works.
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I’ve seen floor traders seem to make the Z Jump but in reality they are running through the “alphabet” of their experiences and facts, very, very fast. Do not, as they say, try this with actual money. Collect each piece of evidence without bias.
BONUS MISTAKE #8! This Is Not An Investors’ Market!
NO ONE BELIEVES IN THIS RALLY! Confidence remains extremely fragile, not just for long term investors but for traders, too.
The fact is, many investors have turned to trading precisely because they have little confidence in the “system.” They want to play this market close to the vest.
They discount the future, but can see opportunity in the very near term.
In short, no one believes in this rally, but that’s not stopping smart investors from making a ton of money in it!
The Short Leash Theory
Traders—indeed all investors who adopt an attitude of watchful caution—have the upper hand right now.
My advisory service, Trader’s Advantage, is designed specifically for markets like this.
The advantage of a short-term view is about to be demonstrated with extraordinary vividness. Traders stand to double or triple their money in the course of a few weeks.