Its often said that anyone can make an investment, but only a very few can manage the money. Investing is an action, managing is a process. Investing is a lot like marriage, anyone can get married. But marriage carries a great deal of risk. If you are not willing to put in the work, it can turn out badly and often fail. But, if you are willing to put in the necessary work, marriage (and investing) can be an extremely rewarding and fantastic experience. Getting married is an action; a successful marriage is a process. The problem is many people give up too quickly and are not willing to invest the time and the effort. You can say the same for most advisors. Focus On What Instead Of Why I choose to chart (on average) 75 stocks each day by hand. Sure, it would be easier to just watch the changes on the screen. The computer is such a wonderful tool. It updates every chart for every single stock, mutual fund, index, commodity or market I could possibly follow. There are lots of methods to subscribe to with investing. Charting stocks using point and figure is the tool (or method) Ive chosen for successful investing. It is NOT a black box. Point and figure charts tell you what is moving up. But the charts dont tell you why they are moving. Does why really matter? As mundane as it may seem to chart dozens and dozens of stocks by hand every night, I like charting by hand. I need to chart by hand! It gives me a real feel for what is happening each day in the market. And when youre charting several stocks by hand that reside in the same sector, youll sometimes see them rise together (or fall together), which drive the changes in a sector. Remember, 80% of your return is determined by whats happening in the market and whats happening in the sector you are invested in. So when youve got your ear to the ground (by charting some of your stocks by hand), you get a true indication of where money is flowing in the market. With these point and figure charts, you can suddenly see the way the market moves...like the tide moving the sand on the beach. To some it is slow (and boring). To others it is a process. The process of managing your money. How To Be Like Everyone Else When I began charting years ago, it was just like pulling my sorry butt out of bed in the morning to get on a treadmill! Not my idea of a good time! But I also knew that if I didnt do this, I would be just like every other member of the retail salesforce at a brokerage firm: no new ideas, no clue regarding the direction of the market. Worst of all, Id offer no game plan for what to do. Just another salesman. Yuck. It really bothered me (as it bothers many), that the reason market pundits give to explain why the markets went up or down on any given day seem so ridiculous. Seriously, why would technology stocks sell off because housing starts fell? Theres no connection at all! Instead of searching for why the market (or your stock) went up today, Id recommend your time is better spent focusing on what went up today. You cant beat the market unless the stocks you own ARE beating the market. The stocks and sectors in demand are what are going up today. Id rather know whats working then search for a reason or explanation why my stock is not performing up to our expectations. |
