Monday Morning
8:45 AM - Relax in a cafe. Green tea and breakfast with a friend, shooting the breeze on photography.
9:59AM - Eagerly anticipate the opening of the stock market. (yes... eagerly). Finger poised over the refresh button.
11:25AM - Finalise my positions and close out of the market to earn over half my monthly income.
That was Monday morning for me, the second Monday without traditional employment, and in a stock market slowly crashing and burning to the ground.
Some people would call it crazy to buy in this market, but Peter Sheahan would agree with me. In his book FLIP, he studies succesful ventures that think counter-intuitively and then act boldly. He uses case studies of business giants like Richard Branson, Google, Toyota, Rupert Murdoch and Apple to prove his point.
So how did I use FLIP thinking? I bet against the herd.
Everyone hears about buying low and selling high, but when the market is slow grinding to a painful halt, people are screaming to sell, not realising it's time to buy low. Not one person told me to buy on Friday. Every person I met told me it was like catching a falling knife. I started having butterflies on Sunday... Had I made a devastatingly wrong decision?
No.
I used some careful counter-intuitive thinking and bold action.
Oh, and I used some basic trading fundamentals too (don't be counter-intuitive just to be bold. Action from stupidity is still stupid). Every stock I bought was trading at what I affectionately call a discount. People had been scared by horrible news in the U.S. and had sold my stock beyond it's real value. So I bought them, knowing that the downside was minimal, the potential upside tasty.
I haven't always listened to my sound logic. Two years ago I had plans to buy Nintendo stock, which were being buffeted and had reached the same price levels they had in the early 90's. They were about to come out with the Wii. I knew that. I love gaming. But no one else did. The market definitely didn't. I didn't buy because people told me it was risky to buy tech stocks. I try not to think about that mistake anymore...
I've learned my own lessons in thinking for myself. More recently I closed my sizeable stock portfolio about 4 weeks before it started tanking at the end of last year, I was still being told to BUY BUY BUY. I dodged a flying bullet there. Some call it luck, I like to call it thinking.
Remember, fortune favours the brave, but not the stupid.
Flickr credit - Y roc30
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