Better To Be Lucky Than Good
It's far better to be lucky than good in the investing business. It's not very often we can make a market call for all the right reasons, and then the market does exactly what we said it would. For the egotistical, they tend to inflate their already large heads and forget the fact that luck has so much more to do with it than skill.
Two weeks ago, we wrote an article titled, "The Path Forward Is Uncertain, But You Need To Be Prepared." In the article, we gave readers 3 important market signals to watch by the end of October:
Oil price
Copper
USD
Specifically, we said that 1) oil needed to hold the downtrend breakout line, 2) copper prices were coiling and so whichever way it breaks, it would determine our next move, and 3) USD needed to have peaked.
Fast forwarding to today, copper prices are in the process of breaking out. Oil held its trendline, and the US Dollar appears to be in the process of peaking. The old me would have been pounding the table and saying, "Look how great I am, look at these market calls." But I am always reminded of the cruel lessons I learned from 2018. Hubris and ego are your greatest enemy in investing.
Instead of feeling really great about how the market is moving in the direction we expected/wanted it to move, I just feel relief. Markets are cruel, and when you've been beaten down as badly as we have (energy investors), you tend to attribute the positive P&L to luck. And this, rightfully so, is the right mentality, because this keeps the mind clear and keeps the ego at bay.