RE:LOTS OF TURMOIL & DOUBTIf one really believes the house of cards is going to collapse, the best action is probably to be completely out of the equities markets. I'm not targeting you in this cc123 because I respect you. I'm just thinking out loud.
The mind plays so many tricks on us...recency bias, perception of when it's high or low, what the future looks like, etc. In our minds we make assumptions.....it's probably going to go this way so I'm going to do this. Very important, crucial, and often life altering decisions are made based on an assumption that is formed using the information we have absorbed and processed
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But we see it every day. The brightest and most successful investors, economists, etc. Publicly contradict each other. One says mild recession coming. Another says depression coming, another thar we are on the verge of a new bull market, another that a historic financial collapse Is about to wipe everyone out.One says the fed will pivot and rates will be back to near zero in a year or so, another says we are only at the beginning of a 30 year cycle of rising interest rates. These are people who have dedicated thier lives to this...working at it full time. And they still get it wrong. We retail investors are mostly just part timers...reading this, looking at that, basically spending an hour or 2 or 3 a day trying to form a picture in our mind of what's going on out there. How are we supposed to get it right? Don't listen to all of them because they just cause confusion. Trust in your ability to focus on the important issues of the present. Personally I believe the US is very concerned about the dollar loosing its status and for that reason they keep raising interest rates...to make the US dollar more attractive so it keeps its reserve currency status. I don't think they have any choice and the fight against inflation is a side show.
I remember during the 2009 financial crisis, every day you'd hear someone saying, this is the beginning of a decades long recession and the damage done to the markets wont be undone for a long time.. Look what happened instead. Same thing with the 2020 covid crisis. How many times did I see experts...Mohammed El Erian example...I remember him being interviewed on TV many times. His take on the situation....this is going to take many years to recover. A year later, the markets, and the economy were skyrocketing.
One can say to themselves, sherritt is pretty well bottomed out so even if there is big trouble coming, I'll be ok with my money there. How about the fact that 3 and a half years ago, sherritt was 10 cents. Going back there means you loose almost 75% of your money.
You can buy a stock for $100 and if it falls to $10, youve lost 90%. You can buy at $10 and if it falls to $1, youve lost 90%. You can buy at $1 and if it falls to 10 cents, youve lost 90% of your money. Thats the trouble with the stock market. No one really knows where the bottom is or where the top is. Bevause its mostly sentiment driven. Ie: irrational..
The only way to deal with bouts of market insanity is to have faith in society and believe in the resilience of people to overcome. As the great investor Howard Marks said.....we tie ourselves to the mast and wait for the storm to pass. We don't jump ship. It's not easy to do...most just sell and run when the fear sets in.
Personally, I don't believe anything is coming. Things will just keep rolling along. Because since the great depression of the 30s, our governments have continuously increased the welfare state approach....don't let bad things happen, bail everyone out and keep things going. So hold your sherritt shares. What's the worse that could happen? They go to 10 cents? That's not so bad. What's bad is when something goes to zero