If my first cat were just a little smarter, I would have her trade for me. Like most cats and their owners do, we play a game where I drag a string around the ground near her. We both know that she wants the string, and we both know that it’s my goal to yank it away from her before she can get it.
When we play this game, she is completely still. To the extent she can, she watches with her eyes, and doesn’t move her head. I can pull the string less than an inch from her several times, and she just observes. Sometimes, she even starts looking off elsewhere, as if she’s lost interest. Then, just when my attention is waning, she grabs it with a speed and intensity that startles me. How she knows when I’ve been lulled is beyond me.
This is perfect for the market. Stocks move in ways that are VERY tempting. But, remember, it’s tempting for everyone, and doing what everyone is doing doesn’t work. The way to win is to wait until the market’s not trying to sucker you in anymore, but is still presenting a high-probability opportunity.
My other cat has the opposite market attitude. The moment he sees the string he lunges with all he’s got. About half the time, I can beat him, and about half the time, he’s so fast he can catch the string mid-yank. The upside of this approach is that it’s a lot more exciting… we go through several trials a minute, rather than one every couple minutes like the other cat. And he does win about half the time. But, this cat, despite how incredibly fast he is, would be slowly whittling down his account.
Which cat are you more like?
