I don’t know how the overall climate is where you live, but here in Central California, we have had three straight years of below-average rainfall. We call this a drought. Given this, our local weatherman has become quite popular, as in, more and more people watch the weatherman with the hope that he will “predict” rain. And so it goes; we watch, listen, and hope he is right.
Last night, the rain came in, and it came in hard. The two cells that passed over us dropped just under 1.5 inches of rain. This is quite a bit of rain for a climatic zone (Coastal Desert) that averages 22 inches per year. Mind you, we love this rain, but the problem is that out local weatherman predicted less than a quarter-inch of rain, which leads me directly to a statement and a question that recently arrived …
Read your article, noting your Motto: “Cash is king.” (a good one) Although I don’t follow my own motto well, mine is: “Don’t listen to the chatter on TV as information to help make a trade.” This is the first time I read your column, so I have a basic question: what is the software you use? I assume it provides you with technical info.
First things first, if I might. If you have trading rules or philosophies, it does you no good if you don’t follow them. So, either follow your rules or abandon them. Now, having said that, I will tell you that your philosophy regarding TV “chatter” is important, but it sounds as if you have carried it a bit too far.
Yes, some of the TV chatter about the economy and the markets is nonsense and agenda-driven, but much of it is solid; it only needs careful consideration on your part. You see, the data for all of us is the same. Aside from any inside information, or information gathered from loyal sources that is “breaking,” the data sources are available as public information. Generally, the information the “talking heads” have, we have. So, if you are at least generally aware (as you should be, minimally) of what is happening, and you understand both fundamental and technical analysis, you can evaluate what the talking heads have to say and then use it, or not. I have picked up many good trades from listening to TV analysts I trust, which is something you should consider. Find and follow several good TV analysts that you trust.
Consider also the “breadth” of what the TV analysts are saying as a way to qualify what it is they are telling you. For example, the ones I trust work in the small world of details, referencing technical charts and specific fundamental information about a market or a specific stock. The ones I don’t trust are those who take lots of general data and turn that into sweeping predictions about the overall markets and the economy. Even now, I chuckle as I think back to those serious faces and resolute voices telling us back in the summer, the DIJA would drop to less than 1,000, that the financial crisis had another, more debilitating “shoe to drop,” and the rally from March to August would definitely end in September with a resounding crash. As I said earlier, nonsense.
As to the software part of your question, I use VantagePoint, and it does provide technical information.
Trade in the day; invest in your life …
