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In April 2015, wow that's nearly 9 years ago, I wrote a newsletter titled "what if". It's not necessary but you can reread it here if you like.
https://www.easysharetradingsystems.com.au/products-and-services/archive/listid-1/mailid-79-what-if
I followed it up again in August 2016 with the newsletter title "What if revisited" - with the observation that none of the doom and gloom talked about 18 months previously had happened. Below are some of the "what if" questions I asked in that first newsletter in 2015.
What if
“what if” is a question I hear from many investors and traders.
What if interest rates rise
What if the housing market collapses
What if the stock market collapses
What if global stimulus doesn’t work
What if the global debt sends the world economies into another great depression
What if we have hyper inflation and money becomes almost worthless
What if we have deflation and assets become almost worthless
What if there is a war
What if Europe falls into total chaos via a collapse of the Euro
What if China collapses
What if it’s all just a global bubble and a house of cards destined to end in certain disaster
I suppose you could say some of those things have happened, with varying degrees of severity. I am sure we would all agree on one thing, that no one would have been able to predict the events of the last 4 years since the start of Covid. "Yes, and its been so volatile!" you would say. But has it? I would say not really, if we take a long term look.
Most opinions about trading, investing and the markets are governed by perspective, so here is another one for you to consider.
The chart above is a 40 year graph of the ASX 200 in Australia. It's in logarithmic scale, which adjusts percentages of appreciation and depreciation more accurately than a simple linear graph. To me, there are three periods of price volatility that stand out.
1/ the early eighties rally and its correction.
2/ the early noughties rally pre the GFC and its subsequent fall in 2008.
3/ the Covid crash and rally (which looks like a blip compared to the first two).
Coming into the present (which is all we have) one could say that the last 16 years since the GFC looks relatively calm, compared to the eighties and noughties. Also, that the current price action is building for a big rally! Similar to the rallies we had in those two previously mentioned decades. Now that statement will get the technical analysts arguing :)
The point is this, and regular readers will know it's always been my point. A boringly repetitive one. No one knows and all we have is a plan to stick to. Of course there are tricks of the trade, like anything it helps to have experience and know what your doing, but no one can predict.
I love the story about President Truman, when replying to a journalists question, who dared ask about the fortunes of the economy during the Great Depression.
“Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other...”
Of course what the President wanted was certainty but his advisors were smart enough not to give it!
So what if?
What if interest rates don't rise or at least stay steady
What if Chinas economy recovers and stimulates
What if AI drives the economy more than thought
What if the transition to clean energy creates more opportunities and profits
What if Elon Musk gets to Mars (well maybe not so soon)
Anyway, humour and history aside, a reminder I am presenting an online lecture this weekend. I will be discussing some of the above and more in my talk on Sunday. Below is the link to register and its a free event.
https://www.gomarkets.com/au/trading-mastery-2024/?idU=1
Also, here are the links to my 52 week high page with market comments, and also the Zen Trader book page. The book is still hovering around the rating of 4.2 from 5 stars on Amazon and thank you to those readers that have taken the time to post a review. If you have not please do so...
If you are a person interested in self improvement, or looking to expand your thinking, I recommend you read it. (or maybe just start by reading the reviews)
https://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs
https://www.easysharetradingsystems.com.au/products-and-services/e-books/zen-trader
Ok, thats it, see you online Sunday, if not have a great weekend doing your favourite thing.
Peter
"In 2016, I was offered Zen ordination. I felt I wasn’t ready
for such a commitment and needed more study and training, so I
travelled to Taiwan and then on to Japan for a meditation retreat.
One morning I was working alongside an elderly monk, weeding
the temple paths. I asked a technical question about Zen, and he
said to me, “See that weed in front of you? Pull it out.” Undeterred,
I asked another question, and the response was, “See that other
weed beside you? Pull that one out too.”
At that point I realised what he was attempting to teach me. Zen is
not all about what you know, but how you might be. Trading is the
same.
I then weeded in silence."
From the Zen Trader page 122
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