Don’t Fight The Tape

Before I get into it, this bit about ‘checking in at the airport’ from Sebastien Maniscolco is hilarious.

Ok…

On Friday, the real trade war with China began. I guess time will tell when that affects Facebook or Netflix.

In the meantime, and as always, every stock market daily summary headline includes a ridiculous ‘due to’ or ‘ because of’ addition.

As a trend follower and 8 to 80 dip buyer, I have to ignore almost all news. Though I skim Stocktwits and Twitter all day and see headline after headline I have learned to let almost all of it go.

My favorite ‘serenity now’ investing term is ‘Don’t Fight The Tape’. Wikipedia defines it:

Don’t fight the tape is a term used in finance. It means do not bet or trade against the trend in the financial markets, i.e., if the broad market is moving up, do not bet on a downward move. The term “tape” refers to the ticker tape used to transmit the price of stocks. It is analogous to the trader’s maxim, “The trend is your friend.”

I read this great insight on Osam.com, which is really how I find stock market ideas:

Momentum is doing a better job of identifying growing companies than Glamour was doing. If you want to find companies that are going to experience strong upcoming growth, you should look for companies with strong recent returns.

It is very tempting to fight this tape. The loudest microphones seem to be held by the miserably bearish right now.

This bodes well for the stock pickers that are staying with winning trends.

Have a great Sunday.


Originally published at Howard Lindzon.

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