We chase all our lives….cars, girls…chasing is AMERICAN.
BUT, chasing at best is a tactic, not a strategy.
I have been talking about ‘chasing’ a long time. It is VERY dangerous. In hindsight, Chase (see Chase Manhattan) is an awful name for a bank as well.
If you chase, you better have great money management skills. The best investors and traders do not chase…they are disciplined about valuations and prices.
People throw around the term bubble as if they are easily spottable. They are not. It is an overused term. It is too dramatic.
Momentum is a pattern and you can develop strategies around it. Momentum builds to a crescendo when people begin chasing. The fear of missing out is greater than the fear of being involved. Pattern recognition.
People chase. It shows up in sectors and prices all the time. Tulips…chased, Internet Stocks…chased, Silver…chased.
You don’t have to catch bottoms or tops find huge winners, but if you chase, you will get crushed over time.