Preserving your capital

So following on from yesterday, I guess the point I’m making is that many folks when they’re coming to the marketplace and even some very, very sophisticated folks, who’ve been around for a while, start to think like, ah, I’m in a draw down. I gotta find ways to make money. And if I’m allocating money, that’s not my outlook. I wanna hear you say things like my goal is to preserve my capital. My goal is to minimize my losses. My goal is to sit on my hands when I don’t have an edge that I know I can exact on the marketplace, because the money that you don’t lose, you don’t have to earn it back. And until you’ve been in that spot where you’ve gotten blasted, all right, that puts you in a very bad emotional spot because you always say, wow, I should have known better.

And that’s a tough spot to be in because now you’re trading with scared money you’re down. You have regrets, right? Been there, been there. It’s easy to get. It’s easy to get to. So remember, I don’t care if you’ve got one month under your belt. And you’re really, really excited about whatever the fed of the day may be. The market is always morphing to try to have you give them their money. It’s not quite as bad as playing the lotto where you have negative expectation, negative, expected value, those games. Somebody definitely wins, but the game is a negative expected value. If you play it long enough, you’re just gonna lose your money. So at the end of the day, make sure that you come to the marketplace excited about what you can do, but get excited. Not about the names, get excited about creating your process.

The names will come and go. Right? When I was younger, there were all kinds of NASDAQ names that were exciting even before the the internet stuff. But what you needed to get excited about was the process. What is your process that you can follow day after day after day, the names aren’t people to, or things to fall in love with they’re just waves to surf…Yes. Fundamentals matter. You’ll hear these chart reader guys be like, I don’t give a shit about the fundamentals and some kind of bullshit, macho talk, but fundamentals do matter. Ultimately, companies have to make money. If they’re gonna keep trending up sooner or later, though, trends can certainly end in reverse stocks. Of course are secular. Some sectors move in and out of favor, commodities are cyclical. And obviously they gyrate as well. Moving in and out of favor, of course you could trade stuff long and short. You’ll have to figure out what’s appropriate for you. But at the end of the day, the goal, no matter who you are and how excited you are is to keep your losses small. If you think you have superior knowledge in crypto, you might come in with a lot of hubris

Because you might know more about blockchain. You might even know how to write in has school and this and that, but that doesn’t mean shit in terms of whether or not you could manage risk. So don’t get over your skis about what your knowledge and your wisdom is. At least if you’re trading, cuz trading is a skill as is coding, right? Investing is something different. Sure. You can buy ADA at 40 cents or whatever it’s at and hold it for a hundred years and claim to be Warren buffet. But we saw what that we saw, how that played out with CMGI and internet capital group in the.com scenario. They were calling David Weatherall, the, the Warren buffet of the internet, go look him up at any rate. You don’t wanna be in that spot where you’re losing money because you think you’re onto something while you don’t have a process.

And I’ll say it again. If I’ve said it a million times, your goal is to not lose. If you wanna get pro results, you have to think and do what the pros do. And the pros wake up in the morning, not necessarily in fear, but they’re always thinking about their blind spots. Where can I lose? How can I lose? What am I missing? And if you don’t have that type of mindset, you put yourself in a very bad spot because you end up being the philanthropist. That’s giving all the pros, their gains. It’s the way that it works.

So play the same game, focus on not losing. Of course you can be excited about whatever name you wanna be excited about whatever instrument you want to trade. But the thing is you wanna be focused on your process and if you don’t have a bonafide process, then stay out of the market, cuz you’re gonna give your money away. You might as well give it to the guy on the street. Who’s starving. At least it’s going to a good cause. All right, that’s all I got for you. I’d encourage you please to subscribe. Cause we get some really good data past two weeks. You folks have liked this quite a bit. So that’s helpful. So I know kind of stay on track or what you like, what you need. Of course, for those of you that don’t write in, we’re on YouTube, Spotify and all the other podcasting platforms. If you have that software, which you can get for free, you’ll get every episode that we publish right to your device every day, every morning, Pacific time. Also if you haven’t already gotten a copy of the audiobook version of my book, the inner voice trading, you can get that for free. It’s very helpful in markets like these Martin Chronicle top right corner. It’s on me and that’s it. I hope you have a great weekend. Clear your brains. Come back Monday fresh. I’ll see you next week.

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