Play the Long Game

Don’t be a day trader.

Don’t try to figure out the stock market.

You can’t figure it out.

The only rule that seems to hold true is that the stock market goes up overtime.

If you try to time out the stock market in the short run on any stock or commodity, you run a greater risk of losing.

Forget about options. That’s pure casino gambling.

Don’t try to base your estimate of the stock market on what happens in the news either.

If interest rates go up, that doesn’t necessarily mean that the stock market will go down.

The market may decide that interest rates didn’t go up as much as they thought they would, which is good news to the market.

You can say the same for earnings.

If a company has bad earnings, you would expect the market to go down for that particular stock, however the market might say well, “We see the earnings as better than we thought they would be. We thought the earnings would be far worse. “

The market plays these games all the time.

For that reason, don’t pay attention to what the news says.

Don’t pay any attention to what the analysts say either.

Do your own research.

Look at the income statement and balance sheet yourself.

You should also be investing in stocks that you personally use.

Today, the New York Times was talking about a company called Albemarle which is a big lithium producer.

You would think that this would be a good buy because the stock is off its high to a good degree.

As I was looking at the stock today, I asked myself: What the hell do I know about lithium?

Do I purchase raw lithium?

Do I know anything about the customer service at Albemarle?

Am I a chemist?

Do I work in the energy sector?

Does raw lithium affect my core business?

The answer to all these questions is no. I’m a pediatrician.

For these reasons I have no context to believe in this company in bad times. I’m a babe in the woods.

For that reason I’m going to jettison Albemarle quicker than you say Joseph Priestly.

Now, Albemarle might be a good investment for Kent Masters, the CEO.

But not me.

I’m going to invest in companies I use, know and have confidence in.

But that doesn’t mean I’m going to bet the ranch. I’ll place a sizable chunk but hold at least 1/2 my allotment back in case the stock goes lower.

And when the stock goes lower, I will buy with confidence.

I still won’t bet everything though.

I’ll bet only the allotment I can afford to lose.

The goal is to play for the long run: decades.

You want to be one of those guys who everybody talks about. You want to be one of those guys who buys a stock in the early days.

The goal is to not sell your stock just because it goes up 75% or 100%.

What you want to do is keep that stock for decades so that it splits once, twice, thrice.

Play for the long run.

Pick stocks that you think will be around for 50 to 75 years.

For that reason you have to keep an eye out for stocks that YOU consider blue chips that you like and that you see other people liking.

These stocks have to have a little sex appeal.

Investors like sexy stocks just like they do sexy people.

I don’t get an erection over Albemarle. I might on Apple Computer.

If I buy and hold 2000 shares at $10 ($20,000)and it travels to 2000 shares at $100 ($200,000) then splits 4:1 back to 8000 shares at $25 ($200,000), I’m not going to sell.

I’m not going to sell because I’m going to be very reluctant to put $200,000 back into the market. I will say to myself: Oh no, that’s too much.

But if I leave it in, I won’t be thinking that I’m investing $200,000 because I only put in $20,000 to begin with.

Do you see the difference?

If I leave that $200,000 in play, when that stock rises another four fold, I’ve got myself $800,000.

At that point, I still won’t take it out. I’ll leave it in and wait for another four fold rise for a cool 3.2 million.

That’s how you are going to get wealthy.

The reason why people don’t do this is because they feel obligated to take the money out when the stock makes a little bit of gain. And they don’t wanna put the money back because they think it’s too much money to put back.

Or they get bored. Or they see somebody making a pile of money somewhere else. So they take it out.

Be one of the smarter ones. Buy and hold, and forget all the sexy day trading that will get you nowhere.

In summary, with daytrading you will never be able to time the market. You will never be able to outfigure the market.

Be a winner, not a chump.

Sincerely,

Archer Crosley

Copyright 2022 Archer Crosley All Rights Reserved

The Seductress

The main thing you need to know about the stock market is that it’s rigged.

It’s always been rigged.

It’s always going to be rigged as long as the knuckleheads are in power.

If they had wanted to not rig the stock market, they would’ve done it.

But why would they want to do that?

The casino’s a business.

They not only need a rigged stock market to fleece you of your money, they need it to give reliable profits and gains for their professional money managers at the top brokerage houses.

Doesn’t it seem odd to you that on average year after year these top firms can give clients reliable gains?

Sure, there are downturns, of course.

Sure there are stocks that fail, of course.

On average though, the stock market reliably gives them the gains they need in order to sucker people into participating in their scam.

The big downturn seems to be a necessary thing every now and then.

This is the grand fleecing, the grand evening, which makes the stock market overall a net loser for you.

Why is that?

If the stock market overall is a net winner, why don’t you see these gains also?

You don’t see them because you’re a human being who gets scared. When the crowd starts running because a bear is chasing them, you run also.

It takes strength to hold your ground when you’re about to die.

You aren’t thinking about profits; you are thinking about survival.

So you get out of the stock market.

As you are getting out of the market, the big boys are buying up your stock.

Why are they buying up your stock when the media they control is creating all this fear?

Because they know.

They know things that you don’t know, and they have the resources to get through any downturn.

They also have the resources to gamble.

From time to time though, there are people who think they have the system beat, and the media which the big boys control allow these people to project their advice to the people.

They will tell the people that what goes down must come up.

It sounds logical, except that Isaac Newton didn’t say that; he said the reverse, and he was talking about gravity, not the stock market.

Nevertheless, these market mavens, these know it alls, these supreme wise investors will convince you that what goes down must come up.

This isn’t necessarily so as the investors in the dot-com bubble learned the hard way decades ago.

I remember those days.

I remember those days because at the time I wasn’t in the stock market.

I remember my friends getting fleeced out of their money.

All of it.

Many small investors kept piling more and more money in to the stock market as the experts told them that what goes down must come up.

I remember reading these articles. I remember the stock advice programs reassuring investors of this “maxim”.

While this is true for the big boys, it may not be true for you.

It all depends on how much pain you can take.

The big boys can take that stock down and down and down and down and down.

And they will if they have to.

They don’t care.

They’ll make you bleed so much, you’ll buckle and never want to come back.

They can do it through the media that they control. If the media talks about fear, the people will be fearful.

The people will stampede, and eventually you’ll run with them.

After you’re beaten up and busted, the big boys will buy the stock on the cheap and then bide their time.

They can do it.

They can do it because they are linked in to huge capital markets that will either loan them the money, give them the money, or print them the money.

Who is going to do that for you?

Nobody.

And you won’t be inclined to do so anyway.

Unless of course you understand the racket that goes on in Wall Street.

You may think you can beat the market.

You’re wrong.

The market is a seductress. It draws you in, chews you up, and then spits you out.

It gives you just enough winnings to make you think that you’ve got the system beat, then it yanks the rug out from beneath you.

It’s a temptress.

Come on in, join the party, have a little fun, make a little money.

And so you do.

Life may be a little dull for you, and so you reason, how will a little fun hurt?

Ha ha ha, the market laughs.

Sincerely,

Archer Crosley

Copyright 2021 Archer Crosley All Rights Reserved

Set It and Forget It

When you invest in a company, invest no more than you can afford to lose while adopting the set it and forget it theory.

Don’t be a day trader in that stock or company.

Day trading is pure misery, and you won’t win anyway.

You’ll never beat the high frequency traders.

You’ll never beat the big boys.

They know every trick in the book.

You won’t take down Wall Street; Wall Street will take down you.

If you don’t have the guts to invest in a company, don’t invest.

You either believe in the company or you don’t.

Forget about taking a little off the top.

Ignore practicality.

Be a hog.

Have courage and forge ahead.

Beg to be slaughtered.

Now, of course, there are always going to be extenuating circumstances that will make you rethink your position.

If new information comes along that leads you to believe that your investment is in great jeopardy, then leave.

If you leave, don’t go back.

It’s the only way I know of to immunize yourself against day trading.

Here is why day trading and getting in and out of a company doesn’t work. It’s also the same reason why the set it and forget theory does work.

Let’s say that you have $10,000 to invest in a company. You do so, and your value in the company after ten years goes up to $100,000. Suppose that you decide to take your profits at that point in time. You sell, after which the stock drops to $80,000.

You then think about getting in. Are you going to invest $80,000 back into the stock?

No. You are not going to invest $80,000. You are not going to invest $80,000 at all.

You are a human being driven by fear.

You have already gotten your profits, and you don’t want to lose those profits. So what you will do is put in a much smaller amount. You’ll probably invest only $20,000 max.

Suppose that after you re-invest your money, the stock after 10 years goes up 10 times again. What will your profits be then?

If you reinvest $20,000, you will net $180,000 in profits on the second go around.

If you had left your money in and not taken profits, your total net would be $990,000.

That’s a heftier chunk of money than 90,000 plus 180,000 or $270,000.

Leave your money in.

Play the long game.

If you win, you win.

If you lose, you lose.

When you take this approach, you immunize yourself against the hucksters and the scaremongers in the media.

The Wall Street Journal has no power over you.

CNBC has no power over you.

If you win, you win big.

If you lose, what have you really lost?

You would only lose what you could afford to lose which in this case is $10,000, not a life destroying loss.

It’s not like you don’t have other investments, right?

If you don’t, you should. Never bet more than you can afford to lose.

But when you do bet, set it and forget it.

Sincerely,

Archer Crosley

Copyright 2021 Archer Crosley All Rights Reserved