Classic (Bad) Human Psychology in Stock Picking

Classic investor behavior as shown on Tim Knight's blog Slope of Hope (kudos to reader for emailing this to me):

click to enlarge
Trust me, I feel like this right now with those darn commodities, although we still hold some good proportion - right now we are in either step 13 or 15 of the commodity "bounce" ;) The difference nowadays is the full spectrum of the above chart used to take months to play out - now it takes a few weeks at most, and many times a week or so in our A.D.D. trading/quant fund led market.

P.S For those who follow Ken Heebner, it looks like he has abandoned the commodity trade in the past 10-15 days. Or cut back severely. His concentrated holdings should of been up somewhere in the 4-5% range today.

Instead CGM Focus (CGMFX) was flat - today was a key "tell" to see what was suspected over the past few weeks was indeed true. After 6-7 weeks of pummeling it looks like he said 'no mas' sometime in the past 2 weeks. A change in direction - right or wrong, we won't know until we look back in a few months... interesting nonetheless.

We're just spreading our bets over multiple sectors at this point (we finally enjoyed a nice day - up nearly 2%), and ready to go much more heavily short if the market gets off the Kool Aid. Back at it tomorrow.

Comments

[teaboy:]

Have,nt laughed so hard all year!, that was great.

2008 Aug 14 09:42 AM

[taxmarc:]

absolutly personally identiable

2008 Aug 14 12:24 PM

[dc1:]

Thank you. That was sooooo funny and right on spot.

2008 Aug 14 12:45 PM

[wpdragon:]

you forgot to blame the hedgies, the shorties, the naked shorties, the MM's, the specialist, the level two guys, the media, the "manipulators", the bashers, the insiders, the libs, the dems, the anti "free" traders, the SEC, the FED, the French, the dog... and me

2008 Aug 14 01:34 PM