Welcome to Momentum Monday. I hope you all had a restful Easter period.
“Tiptoe through the tulips” - The Tiny Tim version - has been playing in my head all the past week. I am not sharing this earworm because it makes me happy. Nor is it a bad April Fools Gag. Rather, us closing a shortened trading week on an all time high means life doesn’t get any better than that! Quite frankly, life is too short to be stressed or upset at the moment. Lists are bursting, and you have to look hard to find a stock not heading in the right direction.
But this creates another problem. The problem of ‘greed’. I know what it feels like. I’m a hot blooded investor like the rest of you. When I'm making money I am going to keep making money? Right? It's like playing at the poker table, winning a few small hands…. But then you feel confident enough that you go all in… and we know how that ends!
Times like this are what differentiates stock pickers from money managers. I know it is hard. Taking profits off the table, rebalancing (if you invest fundamentally) and getting your exposure levels right are all essential now. I remember the great Warren Buffett when he reminded us to be fearful when others are greedy, and greedy when others are fearful. At the moment others are greedy, so we know how we should be positioned.
As a momentum investor this is none of my concern. Because I am ruthless in selling when it goes the other way. Simple as that. If I know why I get into a stock, I’ll know when to get out. So if I use Momentum on the way in… I must use it on the way out. I don't mind impersonating a seagull at the end of a footy match fighting for scraps because that is a valid strategy. Let’s face it, gaining 10% in a quarter or more is not the norm and therefore we must accept the market zigs and zags. I hope it continues, but as a pragmatist I know it won't. So I will be ready.
But it ain't this week.
Also it was great to have a member from Stockopedia Global team join us in Australia for the last few weeks. Keelan Cooper…
