seattle prattle wrote:
Ghost of Igloi wrote:
Not really. You think you can trade around the most overvalued market ever. You believe there is a signal that allows you to avoid principal loss. The riskiest market ever encouages your foolish beliefs. Pretty simple. I try to pont out but you just can’t see beyond what is in front of your nose.
Your method is neither the only rational response nor necessarily the best.
Is it not entirely possible that the market, even if overvalued, may continue to trade in an overvalued state for many years or indefinitely? Is it not possible that the model you have constructed, or others have constructed but you subscribe to, may be leaving out certain relevant factors? Is it not possible that after years of misjudging the direction of the market, one might abandon or significantly revise their strategy?
Anything is possible. Market history says otherwise. The more likely conclusion is you, like most who post here, have been spoiled by a one direction market recently. So you conclude that what has been will be. Yet the most important financial law you ignore: the price you pay is inversely correlated to your investment return.