It's not the bulls and bears you need to
avoid -- it's the bum steers.
Chuck Hillis ~
1= Stock is going no where; its pure
junk, let me look at something else.
2= Lucky break, its going to definitely crash.
3= What, it's still going up, earnings are not so good,
people are definitely getting carried away, its going to
pull back and crash.
4= Ahh, see I knew it was going to crash, thank God I did
not buy. (Mistake the mass mindset misses the main point
here. Yes it pulled back, but look where the pull back
ended--miles away from its first break out. A losers mind
can only see the picture for what it is not, by
replacing it with a picture from his or her imagination.
Since they live in a losing sphere they focus on the
negative aspects but not on the positive aspects.
5= What happened here; this stock was supposed to crash, how
the hell did it get here? Perhaps I should have bought, I
could have made a lot of money; this looks like a sure
thing. (So only halfway through stage 5 will the mass
mindset decide its safe to venture out. Now this person
finally musters the courage to buy.) Wow it actually went
up, great, I'm making money.
6= This stock is going to go to the moon; let me tell all my
friends about it; it looks like a sure thing.
7= What happened? it pulled back. Ahh, I am not going to
fall for this like I fell for it last time (look at number
4). Time to buy more, buy on the dip, thatís it.
8= I knew it, its going up and I made more money, wish I had
bought more. Next time I will invest more on the pull back.
(Notice the loserís mindset does not bother to take time to
notice that the stock did not put in a new high. All that
matters is that it went up.)
9= It's going down again, time to really load up; I donít
want to lose this opportunity. Earnings are great so it must
be a good time to buy some more.
10= First dose of bad news and the stock takes a big hit;
okay, this is just temporary; it's going to go back up.
(Blind faith huge mistake, one of the main ingredients of a
losing mindset). Let me buy more and average down.
11= Maybe I should sell now; things donít look good, but you
know what, let me just hold for a bit longer. Maybe things
will change. Yeah, things have to change; look how fast this
stock went up and it has pulled back so much. The worst is
over; it has to go up.
12= This stock is dead, I have to get out; it's not going
anywhere (this is when the stocks start to bottom. The
secret programmed desire to lose syndrome has completed its
mission. Trader is in state of extreme distress and
shell-shocked). I am never going to look at this stock
again; I knew it was garbage, why did I ever buy it in the
13) Slow base formations and the possible start of new up
trend and the worst part is that this trader is out.
Take a close look at the above picture;
the masses will react in the same way when it comes to this
commodities bull market. They will dump when they should be
buying and then they will try to buy when they should be
selling. Nothing in this world comes easy for if it did, it
was not worth it in the first place. So make sure youíre
positioned well to take advantage of the coming spectacular
bull market. So far we have just barely begun the first run.
This is not to be confused with the
concept of buying and holding. Every now and then it's
prudent to take some profits off the table and invest this
money when there (gold, silver, oil, etc) is a pull back.
However one should always maintain a core position as long
as the long-term trend is up. Thatís exactly what we did; we
took profits in November-December 2003 on Ĺ our positions
and are waiting for an opportune moment to add to them
again. When we wrote an article suggesting that individuals
take some profits on their gold and silver positions, we
were attacked on the basis that we were trying to promote a
sell off. We specifically stated that one should not sell
their core positions, but only take some money off the
table; but everyone seemed to miss the last part of our
statement. If you look closely most of 2004 Gold stocks did
not really do anything and in most cases actually lost
money. However, this type of behaviour is quite normal.
First you have a massive move up, then sideways to down, and
then a final quick pull back to flush out all the weak
hands. Now just when everyone should
be studying the charts to look for new entry points, the
weak hands will start to unload their core positions and
this will indeed be a fatal mistake.
It is what we think we know already that often prevents us
Bernard 1813-1878, French Physiologist ~