Aug 22, 2016
“We all avoid reality non-stop. We don’t know where it starts
and where it ends. We don’t like to look at facts. We don’t like
new information. We have biases that are non-stop.” Michael goes
down a reality tour of market prices today. He talks about past
prices in the market and the present all time highs we are
experiencing right now. He makes listeners think about prices and
how they move rather than voices at Bloomberg and CNBC. Michael
says, “Just focus on price action and look at markets from a
‘desert island approach’.” Trading price is the only information
you can trust. He gives examples from the past including the
dot-com bubble, housing crisis, 1989 NIKKEI crash, Gold in the
1970’s, and possible current bubbles.
Michael emphasizes to put away all the noise and just look at the numbers. He is not saying when there will be the next market crash, just that there will be another one. Historically we are due for a significant decline. What are the odds that the S&P losses 50%? If you are going to retire soon, or are in retirement and the S&P drops, how will your life be? Will you be able to ride it out? Do you have an alternative strategy? Big questions.
In this episode of Trend Following Radio: