If only...

"If 'ifs and buts' were candy and nuts we'd all have a merry Christmas." -- Don Meredith


I frequently see people on stocktwits and other message boards making comments along the lines if only I would have bought XYZ stock, or sold ABC stock at such and such price. I too was guilty of such thinking, I can't count the number of times I would think to myself "if only .."



This is destructive thinking and it will destroy your equity.  I find that it usually manifests its self in several ways.  One thing I commonly see is that people try to find the "next Apple, google, netflix, or other highflyer of the day.  Those types of stocks are naked emperors wrapped up in somebody else's clothes.

For example, YOD, the "Netflix of China," enjoyed a big surge after being christened with the label, but soon reality set in:

When people have held a mega winner only to sell to early, they fail to get back in when it would be appropriate to do so.  It is okay to buy a stock higher than you last sold if it is properly set up again. I just did it on HCLP.  I sold at 59 but was buying it back at 62 this week. Rebuying was a good decision as HCLP is now over 69 as of this writing. Yet many traders will simply sit on their hands while the stock takes off and think "if only" I didn't sell.

Finally, many people will buy the fallen angels because if they've fallen they look cheap.  Most stocks  don't re-capture the magic and buying former champions manifest into large losses.  For example, Molycorp was a stock market darling for about a year period, then the rare earth market collapsed and ...

Yet people were buying it the whole way down because its now "cheap."

 If you want the candy and nuts, do the work. Study how the past winners set up:

• What sparked their move?
• what kind of base did they come out of?
• What type of earnings growth did they exhibit?
• Where were the buy and sell points?

This blog is my live market study.  I study my trades in detail and I study the past winners and try to fine tune my process of identifying the next winner.  I'm certainly not perfect and I've made a lot of bad trades, but it seems to be working 44.91% YTD.