Doug Casey explains that the influx of day traders/ amateurs investors will not end well-
I agree with Casey- Many amateur traders/investors will not do well in the end-
Luck will run out and skill will kick in-
I already know people who lost money playing the bankrupt stock mania-
I also know people who are just getting in after the market has run up so much-
The reason why it won’t end well is because many don’t know how to manage risk.
You have to protect your profits and cut your losses. I learned a hard lesson when I doubled down on Yandex while Russia was invading Ukraine- That did not go well-
Also, I got crushed when I doubled down on Transocean when oil price dropped due to shale revolution- Bad, bad, very bad-
After losing almost all of my profits that I have accumulated for 3 years, I started cutting losses and managing risk. Very expensive lesson back then as a student but definitely worth it.
When COVID19 struck the market, I was better prepared. I didn’t sell off immediately or double down- I kept cool-
I bought and swing traded and things have worked out. I always increased my cash position when I thought something was off.
There were instances that I could have doubled the position of my trades but I remembered position sizing! I missed extra profits but slept much better at night-
So yeah- If you can’t manage risk- this market will not end well for you-
What to do? If you are not sure then take some money off, protect your profits-
If you have reasonable stocks (e.g. Google, Microsoft…) then just hold on and never panic sell.
Praying that people invest prudently- We can’t have people blowing up like 2008-
God bless us all-
Rejoice at all times. Pray without ceasing. Give thanks in every circumstance, for this is God’s will for you in Christ Jesus.
1 Thessalonians 5: 16-18
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