Guest Post by Martin Armstrong
Knowing how to trade amid a panic is one of the most important skills a trader can master, and those who have done it correctly have profited in recent years. This is where the greatest amount of money is both won and lost. Few traders over the decades have really mastered this fine art. It takes a lot of courage, confidence, and understanding how the markets really function.
There was only one such trader to accomplish this level of trading that is problem worthy of a Black Belt award — Jesse Livermore (1877-1940). While Jesse did write about trading, he never captured the indescribable “feel” for market movement in his writings that he clearly possessed. I have tried to capture that in creating our computer program. By looking at absolutely everything and correlating it all, it is an artificial means of trying to create that “feel” within a computer.
Nevertheless, bull markets are always longer than bear markets, and that is directly caused by the simple fact that it takes longer to trust something (CONFIDENCE) than it does to lose faith (PANIC). This is human nature, and it is the first step in learning How to Trade a Panic. The opponent you really face is yourself – that internal instinct that causes you to run like an animal in a herd at the sight of a lion. To overcome that inherent instinct that will cause you to run with the majority and lose your shirt.
This is a unique skill set that is needed to survive. It is what the bankers lack, and it is why they keep blowing up themselves. Their solution is to do a reverse takeover of government. We, unfortunately, lack that option. It’s OK, for it is better to dance alone than with the devil.
Knowing how to trade a panic is the ultimate talent in trading. It is the top of the food chain. The black belt in trading.
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I bought mason jars, a shovel, cleared by back yard and turned all my cash into nickels. Very tradable and the only US coin that still have valuable metals in it. Nickel and copper.
Modern nickels are 75% copper and 25% nickel.
Don’t go with pennies:
in 1982, the coin would evolve into its modern form of only 5% copper and 95% zinc.
H/T bruh…metal detectors …go long.
LOL some one thought I was serious!
when it comes to metals… silver and lead, along with the steel and brass accessories that accompany the lead, are probably a much smarter investment.
Ehhhh….When do we get to the part about how to master this amazing skill?
Never?
Ok, never works for me.
Admin you predicted and reported on the decline of retail.
You should check out the decline of eating out.
It’s a shit show just as as bad or worse than retail.
Absolutely brilliant… Learn from Livermore how get them shekels faster….reeeee
On Thanksgiving day, November 28, 1940, just after 5:30 pm, Livermore fatally shot himself with a Colt automatic pistol in the cloakroom of The Sherry-Netherland hotel in Manhattan,
“My dear Nina: Can’t help it. Things have been bad with me. I am tired of fighting. Can’t carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love Laurie”.
Glad you wrote this so I didn’t have to. I read Confessions of a stock operator a long time ago but kind of remember his periods of vast wealth being vaporized in minutes if not days several times. He made money but was also penniless for huge stretches. Trading during the Great depression was not as sophisticated as it is today. Black markets, HFT etc.
Funny that Martin would idolize a degenerate man who spent vast fortunes on whores and compulsive gambling only to kill himself in despair of the absolute shit he’d made of his life. . ….tells me all I need to now about Marty’s value system.
The chosenites are still bring the world the gifts of Mammon and Moloch worship.
Mr. A wrote this about trading, not about moral value judgments. Another great trader, not mentioned, was Robert Prechter, the most important interpreter of Elliott Wave Theory. It was thanks to his 1995 book At the Crest of the Tidal Wave that I decided to emigrate from the USA in ’98 once and for all, given that I agreed that a nation that abandons its industrial base is doomed to eventual failure. His timing was off, as is often the case with forecasters, but in my own trading career I used different metrics and indicators and was able to cash out in ’98 with what I deemed sufficient capital. Naturally, I underestimated what I believed I’d need, but by downsizing my expectations, I’ve managed to build a comfortable and by my standards moral life.
I’m not familiar with your value system, but Mr A is spot on with respect to trading. I believe this was written for those still in the game. Me? I stick to productive tangibles now. My last large “trade” was moving to Argentina and so far, so good. Mr. Milei can kiss all the walls he wants so long as the nation can reach its potential, which is large indeed for those who know the country well.
My Colombian wife and I moved to B.A. a month ago from Medellin to give birth and get a strong second passport. I’ve been a refugee from the U.S.S.A. for 8 years now. Mixed feelings on Argentina so far since I’m comparing the cost and quality to what we’re used to in Colombia isn’t as much of a bargain as it was just a year ago. Though still cheap compared to how badly everyone in the U.S. gets ripped off for basic things. Are you in the capital or did you move out to the countryside? Cheers.
I live in the countryside, in a region of the province of Córdoba called Traslasierra. It’s grown somewhat expensive in recent years, but it would be worth your while to explore it. Seeing as your wife is Colombian, the language will not be a problem, particularly if she’s a paisa.
This will be a difficult year here, but there´s promise of needed reform and there are real possibilities going forward. best of luck!
From Wikipedia, the free encyclopedia
Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, Livermore was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets.
In my eyes, he was a failure and a loser. What a terrible example for Martin Armstrong to use.
better than trying to win them all is having a sense of when to cash out and quit while youre ahead.
If you have no clue about investing I suggest you start watching Gregory Mannarino, “The Robinhood of Wall Street” on YouTube…he’s honest and knowledgeable.
Have you noticed how Mannarino developed a ‘wasted’ look to himself several years ago?
‘Wasted’ in the sense that his body doesn’t seem to be absorbing nutrients, maybe cancer?
As he will turn 60 years of age next birthday and as he could still easily pass for a 40 something, I don’t know what you mean by “wasted” looking.
Seems good for his age.
The only thing I can afford to invest in is my farm.
Good for you. That means you can focus your mind on worthwhile asset.