Five weeks ago I was buying some stocks …describing what fear looked like in this blog post.
Panics do not come along very often in US markets and I noted on January 31:
I chose to buy a few stocks and it worked out. By Friday, we got some relief and you can panic at higher prices Monday morning. I urged anyone that ask and also blogged here that investors and traders close their eyes and buy a favorite brand. It is not a perfect strategy, but it is the right strategy if you have cash on the sidelines (which you should have based on the current market environment).
When the market is in panic mode, a lot of humans are still pushing the buttons and while machines do battle it out on the line of scrimmage with us, I will always trust my experience, eyes, ears and network over a machine.
This coming Monday will be a better day to panic as well.
It is hard not to panic when you read about panic in the headlines, but to make the long-term work you have to survive the short term.
My friend Michael Batnick just put this great post together entitled ‘Surviving The Short Term‘. Bookmark it. Read it.
Take a look at his chart from Michael.
Pull it up everytime you feel the media blabbering the $VIX is skyrocketing or the words ‘rout’, ‘crash’ and ‘panic’.
When everyone around you is panicking, buy a little bit of your favorite 8-80 brand (read my post on the subject here). When you feel yourself excited that you were right…sell a little bit of those same favorite brands/companies. Over time, you will beat all the best funds and your friends and make some money.