"Six Questions"? More Like Six Reasons to Panic
Market Swings: Six Questions for the Clueless Investor (Like Me)
So, the market's doing the cha-cha again, huh? One minute it's moonshots and Lambos, the next it's dumpster fires and ramen noodles. We're all supposed to be calm and rational, but let's be real: most of us are just hitting the panic button and praying our 401(k) doesn't evaporate before we can say "social security."
This article wants us to ask ourselves six questions before making a trade? Give me a break. Like I have time for that when my portfolio is doing the Titanic.
The first question is the classic: "Has anything changed at the company or in its industry that could impact future earnings?" Okay, sure, let me just pull out my crystal ball and predict the future of, say, AI regulations. Or maybe I'll just ask my cat; he probably has better insights than most "analysts" on TV.
Seriously, though, this whole "focus on long-term earnings power" spiel is just a fancy way of saying "hold on tight and hope for the best." Which, let's face it, is what most of us are doing anyway. But I digress.
Nostradamus + Economist = Your Average Investor, Apparently
Macroeconomics and Multiple Personality Disorder
Then we get into macroeconomic perspectives. Oh, joy. "Think about taking a worldview that incorporates everything from geopolitical events to monetary and fiscal policy and macroeconomic data points." Right, because I *totally* have the bandwidth to decipher the geopolitical implications of Trump's latest Twitter tantrum while simultaneously understanding the nuances of quantitative easing.
It's like they expect us to be freakin' Nostradamus *and* an economist.
And don't even get me started on multiples. What is the multiple, in relation to both the stock’s historic valuation and the market? This is where my brain starts to leak out of my ears. "Consider what that has historically meant and how it compares with the market as a whole." I'm pretty sure my historical understanding of the stock market begins and ends with "buy low, sell high."
The article uses Wells Fargo as an example, suggesting we look at JPMorgan's multiple as an "upper bound." Okay, but what if JPMorgan gets hit by a meteor? Are we still using that as our benchmark? The whole thing feels like trying to predict the weather by staring at tea leaves.
Charts, Lies, and Cold, Hard Denial
Charts, Catalysts, and Cold Sweat
Number four: "What is the chart telling you?" I'll tell you what the chart is telling me: that I should have invested in canned goods and a bunker. Technical analysis? Support levels? Relative strength indicators? It's all just voodoo with lines on a screen.
But hey, at least they admit that they "prefer to keep it simple or defer to true market technicians." Honesty is a nice change of pace.
Then there's position sizing. "Think in terms of percentage weighting versus the entire portfolio, cash included." Okay, I'm thinking... I'm thinking I should probably have more cash. This is actually sound advice, but it's also the kind of thing that's painfully obvious in hindsight. A full position is in the 5-6% range? So if I have a panic attack and want to bail, I only lose 5-6%? Great.
Finally, we get to "Are there any catalysts in the near term?" Catalysts, as in, reasons to keep losing sleep at night? "Consider any upcoming catalysts that may prompt you to become more aggressive, such as upcoming economic data or a legal dispute settlement." Yeah, no thanks. I'll take a nap instead.
And the article warns to be cautious before quarterly earnings. Offcourse, because even if a company blows expectations out of the water, the market can still decide to punish it just for fun. Remember Nvidia? Yeah, me too.
So, What's the Point of All This "Advice"?
Look, I get it. They're trying to provide some semblance of order in a chaotic situation. But let's be honest: the market is a casino, and we're all just gambling with our futures. These six questions might make you *feel* more in control, but they're not going to guarantee anything. Sound familiar?
Stock market swings got you reeling? Answer these 6 questions before making a trade.
Maybe I'm too cynical. Maybe there are people out there who can actually use this framework to make informed decisions. But for the rest of us, it's probably best to just buckle up, diversify, and hope for the best. And maybe avoid checking your portfolio every five minutes. Just a thought.
We're All Doomed (Probably)
