Staying Focused & Solvent

At this time I am out of the stock market and simply waiting...

I believe that to become a good stock trader one must hone their skills just as an athlete or salesman would. One of the most important traits on the road to success is being focused and when dealing with the stock market it is easy to become distracted by those who truly believe in a particular stance and those who simply have been trained to keep you bullish on whatever they are selling.

A year and a half ago I stated several times publicly that I believed the stock market would likely "close the gap" up to the July 2008 lows around 11,000 on the Dow. At the same time I continued to trade with a bearish bias; why did I do so? There are a number of reasons but the main one is that I knew that our troubles are long-term and when someone would state a bullish stance I felt the need to correct them...BIG MISTAKE because this got my ego involved and got me distracted from the trade.

Another reason is that I listened to too many smart people who make a living out of voicing their opinions. I don't mean Jim Cramer, I mean Richard Rusell and Gene Inger, both people I respect but I have found out that neither are good for me as a trader because they are selling a service and that service really has little to do with stock trading.

To make a long story short I now make every effort to look at the stock market with total objectivity and I always keep in mind that, "the market can remain irrational longer than I can remain solvent."

--Fred