Manages Parisian Family Office. Began Wall Street, 82. Founded investment firm, Native American Advisors. Member, White Earth Chippewa Tribe. Was NYSE/FINRA arb. Conservative. Raised on Native reservations. Pureblood, clot-shot free. In a world elevated on a tech-driven dopamine binge, he trades from Ghost Ranch on the Yellowstone River in MT, his TN farm, Pamelot or CASA TULE', his winter camp in Los Cabos, Mexico. Always been, and will always be, an optimist.

Wednesday, September 10, 2008

Optimism and Markets..............

The greatest single enemy of long term investment success is not ignorance, it is fear. Fear leads to panic and panic breeds the inability to distinguish between temporary declines and permanent losses. When investors panic they don’t discriminate. All stock market declines have been temporary in my lifetime, and all advances have been permanent. The key to investment success is not found in intellectual babble such as standard deviations, quantitative analysis or chaos theory. Successful investing in the stock market is about time in the market. The single greatest thing you can have going for you is time because no on can successfully forecast market gyrations over the short-term. Long term the market always goes up.

Stock market success is a function of two things: first, recognition that the markets will go down and sometimes go down a lot and two: preparation to regard declines as a non-events and never as an occasion to sell in a panic.

The simple lesson to remember is that markets are not logical or reasonable; they are emotional and unstable. Markets are crowds of people. Today the black boxes at a handful of firms scan the exchange order books every millisecond and automatically execute algorithmic trades, ripping any conceivable advantage away from the public. The market is not an exercise in calculus. It is primarily an experiment in crowd psychology. Stocks are on sale, we are in a recession. The 40 point S&P decline last Thursday was the fourth largest decline on a Thursday ever and being down 12 out of the last 14 trading sessions doesn't feel good. This isn' the time to throw stocks out of your portfolio. Believe it.

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