e Money
Friday, July 1, 2022
No Result
View All Result
  • Home
    • Home – Layout 1
    • Home – Layout 2
    • Home – Layout 3
  • Banking
  • Investing
  • Insurance
  • Retirement
  • Taxes
e Money
No Result
View All Result
Why Bear Markets Are Tough – Investment Watch

Why Bear Markets Are Tough – Investment Watch

admin by admin
January 25, 2022
in Investing
0 0
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

by Charles Hugh-Smith

The number of traders who beat the indices soundly over both Bull and Bear markets are very few in number.

The Bear’s broken clock is finally right. Those clock hands stuck at midnight–well, it’s finally midnight.



Bear markets are tough, not just for Bulls but for Bears, too. Bear markets are treacherous because they are famously punctuated with rip-your-face-off rallies (RYFOR) that shred Bears’ lavish profits and handsomely reward buy-the-dip Bulls.

Then the markets suddenly roll over to new lows and the anguished cries of margin-call-impaled Bulls rises eerily from the depths. Newly enriched Bears–the few who weren’t thrown off the Bear Bus by the repeated RYFORs–rejoice, only to be ejected from the Happy Seat by the next rip-your-face-off counter-rally.

Those playing both sides are wrung out by the churn, and while a few make fortunes, the majority are whipsawed off the Bear Bus and the Bull Bus by the volatility and the soul-crushing anxiety of being wrong yet again.

Bear markets excel at sucking in Bulls at the peaks and Bears at the lows. When the move you’ve been praying for finally manifests, the temptation to go all in and reap the gains for being right is irresistible.

Right when greed triumphs, the market reverses and fear rushes in to crush the euphoria. Bears may know they’re right over the long term, but it’s dishearteningly difficult to stay the course as profits vanish in rallies and the really big crash that mints fortunes remains maddenly elusive.

Bulls see every support level and bit of good news as the much-anticipated turning point where the bad news and the decline finally end. But the turning point is just as elusive as the penultimate capitulation crash. Everyone wants a clear signal that the Bear market is over and the moment to buy, buy, buy is finally at hand.

But Bear markets aren’t quite so generous. The Bear is generous with false signals, false bottoms and false rallies, and remarkably stingy with the-real-deal, this-is-it capitulations.

All the confidence gained in long market melt-ups where buy-the-dip paid off 100% of the time is slowly eroded by Bear markets. Buy the dip works for a few hours or a few days, but only the nimble reap the gains. Those playing with leverage find the gains from 10 successful trades are erased by one trade that got away.

The Bear loves to toy with hope–hope for a turning point, for vindication, for capitulation and for life-changing profits. The Bear market loves teasing not just the vulnerable roller-coaster-riding emotional traders but also the pros and even the algo-trading machines.

The teeming hordes who beat the indices in the Bull market are reduced to a handful of stragglers in the waning days of a Bear Market. Napoleon’s decimated, starving remnants of a once-great army hobbling out of Russia come to mind.

The number of traders who beat the indices soundly over both Bull and Bear markets are very few in number. Bull markets are easy, Bear markets are hard. They require an entirely different experiential skillset than buy-the-dip Bull markets.

Looking back with the luxury of hindsight, Bear markets look like Paradise for the active trader: look how much moola could have been reaped by buying low and selliing high, again and again and again.

Easier said than done, as my chart of the Anatomy of a Bear Market illustrates. What’s easy is being whipsawed and thrown off the bus.

That grizzled old wreck of a trader who mumbles incoherently about the 70s, 1987, 2002 and 2008? Listen to the ramblings, and ponder the runes and wanderings of the shattered mind. Therein lie the secrets to emerging not as a shell-shocked survivor but as the rare victor.













200 views
























Related Posts

What we are seeing is the extreme version of what happened back in 2008. Buckle up. – Investment Watch
Investing

What we are seeing is the extreme version of what happened back in 2008. Buckle up. – Investment Watch

July 1, 2022
The Bank of England is in quite a pickle of its own making – Investment Watch
Investing

The Bank of England is in quite a pickle of its own making – Investment Watch

July 1, 2022
Investing

New York Prohibits Illegal Aliens from Voting – Investment Watch

July 1, 2022
Investing

A Red Wave is Coming – Investment Watch

July 1, 2022
The Catholic Church is Under Attack – Investment Watch
Investing

The Catholic Church is Under Attack – Investment Watch

July 1, 2022
SHTF is Here: Video Shows Detroit police officers show them fleeing shooting scene
Investing

SHTF is Here: Video Shows Detroit police officers show them fleeing shooting scene

July 1, 2022
Next Post
Preferred habitat behaviour in the gilt market – Bank Underground

Preferred habitat behaviour in the gilt market – Bank Underground

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Movers and Shakers: Citi nabs Goldman Sachs exec for treasury and trade solutions July 1, 2022
  • What we are seeing is the extreme version of what happened back in 2008. Buckle up. – Investment Watch July 1, 2022
  • The Bank of England is in quite a pickle of its own making – Investment Watch July 1, 2022
  • New York Prohibits Illegal Aliens from Voting – Investment Watch July 1, 2022
  • Delivering on the promise of conversational AI verticalization is adding real value to chatbots. Now we need to scale July 1, 2022

Categories

  • Banking (612)
  • Insurance (27)
  • Investing (2,520)
  • Retirement (65)
  • Taxes (77)
  • Uncategorized (1)
e Money

We bring you the best Premium WordPress Themes that perfect for news, magazine, personal blog, etc. Check our landing page for details.

Categories

  • Banking
  • Insurance
  • Investing
  • Retirement
  • Taxes
  • Uncategorized

Follow us on social media

Recent News

  • Movers and Shakers: Citi nabs Goldman Sachs exec for treasury and trade solutions
  • What we are seeing is the extreme version of what happened back in 2008. Buckle up. – Investment Watch
  • The Bank of England is in quite a pickle of its own making – Investment Watch

Copyright © 2021 - eMoney.press - DESIGNED AND DEVELOPED BY TEAM WORDPRESS BLOGX

No Result
View All Result
  • Home
  • Home 2
  • Home 3
  • Sample Page

Copyright © 2021 - eMoney.press - DESIGNED AND DEVELOPED BY TEAM WORDPRESS BLOGX

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In