bjorn, honest self assessment.I think what you recently wrote today speaks volumes and I particularly appreciate the following:
"
I should have seen that this decline was coming all the signs were there but I was ignoring them based on assumptions about the general economic condition of the world that turned out to be very wrong. I did not stop and think carefully enough about what was transpiring.
Looking back at when the decline began, commodities were marching upward: inflation was accelerating.
As can be seen in the following chart of the XME (EFT for metals and miners) price was rising in a well defined channel uptrend. Looking back, with the idea of doing better going forward, I should have been more vigilant with regards to a prospective breakdown out of the rising channel seen on the chart. When it occurred, as it did in very early July, when the FED and Treasury moved into markets, turning the dollar around and starting the whole deleveraging process, that was the time to start thinking about a complete exit strategy. But it didn't really seem necessary, economic growth prospects still seemed reasonably strong and ML had its own positive story.
https://stockcharts.com/h-sc/ui?s=XME&p=D&yr=0&mn=11&dy=0&id=p56305435373&a=86694526&listNum=1
I failed to believe my eyes - instead I ignored what they were seeing, stuck in a mindset of rising commodity prices and bright hopes for ML's increased production of still high priced commodites. Now we know why they fell.
Next time when major trends change course so dramatically I promise myself to act first and ask questions later and put aside the fear that I may be getting out of a position that will reverse back upward. When we should see again the tpye of daily and weekly downdraft as we saw in early July, I will put away everything I think about fundamentals, macro and micro and SELL!!!
At some point down the line the bearish story will be well known, and just as afraid as we were to sell out of fear of missing the big boat we must be ready to act on a trend change reversal back up. We may not know the reason why, but we should be able to see it developing and we should act accordingly.
Right now that turning point seems premature to be anticipating, but I suspect over the course of the remaining part of this year we'll see a basing out of this value distruction and a turn. Hopefully our eyes won't be too tired to see it...