Fast forward a handful of decades, and boy have things changed. In addition to basic charts, there are tons of other indicators and services that provide real-time information about companies and individual securities. This has opened the floodgates for other types of trading that exploit different phenomena and short-term price movements. But have all these tools really improved our ability to tell where prices are going, or simply opened up more avenues of revenue generation from different trading styles?
However, what's funny is that basic chart patterns seem to still hold. Ever since the financial crisis, the average person could have simply bought and held upward trending stocks and done very well. Those relying upon crude moving average indicators probably think they're geniuses at this point. Many of those who probably shied away from this tactic are ironically those who have more historical knowledge and have experienced more pain in the markets. They might be grouped into two factions:
- Those who experienced the latest financial crisis and previous boom/bust cycles who skeptically thought that the Fed-inspired rallies could only last so long
- Those exposed to a wider basket of trading styles who probably felt like adhering to a more exotic style than buy-and-hold would yield better results.
Maybe the recent success with a "dumb" buy-and-hold strategy was just nature's way of birthing new fools. Much like the latest Consumer Web startup bubble, which has yet to burst. It's not as bad as the Pets.com era, but it's only a matter of time before investors realize a new chatting service doesn't command tens of billions in valuation.
Going back to the markets, we seem to have a myriad of tools and avenues for investing money at our disposal now, but it's important to step back and realize that the fundamentals don't really change. Don't anxiously await for the Next Big Thing to prove your investment prowess, but instead look for what's obvious - the trends that are right in front of your eyes, but that you often don't want to see since there are so many other distractions that lure you away from the obvious. Set up a trap for Easy 'Pickens, and let them play out instead of always being on edge for that trade-able news story that you've been waiting to hear through your real-time news service.
However, what's funny is that basic chart patterns seem to still hold. Ever since the financial crisis, the average person could have simply bought and held upward trending stocks and done very well. Those relying upon crude moving average indicators probably think they're geniuses at this point. Many of those who probably shied away from this tactic are ironically those who have more historical knowledge and have experienced more pain in the markets. They might be grouped into two factions:
- Those who experienced the latest financial crisis and previous boom/bust cycles who skeptically thought that the Fed-inspired rallies could only last so long
- Those exposed to a wider basket of trading styles who probably felt like adhering to a more exotic style than buy-and-hold would yield better results.
Maybe the recent success with a "dumb" buy-and-hold strategy was just nature's way of birthing new fools. Much like the latest Consumer Web startup bubble, which has yet to burst. It's not as bad as the Pets.com era, but it's only a matter of time before investors realize a new chatting service doesn't command tens of billions in valuation.
Going back to the markets, we seem to have a myriad of tools and avenues for investing money at our disposal now, but it's important to step back and realize that the fundamentals don't really change. Don't anxiously await for the Next Big Thing to prove your investment prowess, but instead look for what's obvious - the trends that are right in front of your eyes, but that you often don't want to see since there are so many other distractions that lure you away from the obvious. Set up a trap for Easy 'Pickens, and let them play out instead of always being on edge for that trade-able news story that you've been waiting to hear through your real-time news service.
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