I remember my mother preparing the meal in the kitchen.
While she is cutting the meat, her pet cat is purring, meowing and rubbing its body against her legs (accident-prone), begging for a meat bait. As always, my mother goes to the laundry room and places some meat in the cat dish. And the cat eats the meat.
Once in a month (not exactly), the cat does not eat the meat. It sniffs it, runs back to my mother and repeats the ritual hey-give-me-a-bait.
Why? I don’t know. There is no problem with the meat, it is the same the family eats. And after my mother leaves the kitchen, the cat behaves normally, not like if it was hungry.
From this scene, that I saw multiple times, I created this concept:
The cat does not want the meat. The cat THINKS it wants the meat.
And why I am taking your time with this story when we could be talking about market operations? Because, probably, you are the cat in the kitchen.
Let me explain. When I say “probably” I am not referring to your profile. I cannot anticipate who is reading this. I am referring to the general profile of people.
More than 90% of people that says that wants to make money in stock market really don’t want this. They just would like to have the profit.
They purr and meow but they will not eat the meat when they have the chance.
They talk about stocks, expressing enthusiasm. They always bring this subject to a conversation. And when the market is low and the opportunity appears they say “Yes… seems good, but I will wait another week. Maybe the market goes deeper.”.
One week later they say “The market went deeper. I was lucky; prices are better. But I will wait another week and get prices even lower.”.
Another week: “The prices had some recover. I lost the best prices. I think I will wait the things calm down. The market is too much turbulent!”.
More one week: “Hum… 30% profit in 10 days and I missed it. Still it is time to enter the wagon… No. I will wait for the next opportunity.”
- I am not criticizing the cats in the kitchen.
2. I am NOT here to say “Don’t be a cat in the kitchen.”.
3. I respect you the way you are.
Being a cat in the kitchen for some time (not mattering how much time) may be your perfect, careful strategy to approach the market.
In case you are a cat in the kitchen, don’t feel guilty. You don’t need to invent excuses for not eating the meat.
We only know ourselves by experience.
Before the meat is in the dish all we have are projections and illusions about ourselves.
The cats in the kitchen are doing a good trade. They have part of the fun without taking any risk. It is the same as watching porn.
The meat is on the dish
The market has fallen. Should I buy now or wait it hit rock bottom?
Of course, you should wait the market hit rock bottom before buying. By the way, would you like to tell me when it will be? I will give you 90% of my goods for this simple info.
If you can’t afford see the things you bought becoming cheaper, this business is not for you. That happens all the time.
For these cases there are strategies not only to not lose money but also make profit.
Despite everything I said, despite the decades I profit in this market, buying something at morning that will be 2% cheaper in the afternoon still annoys me.
However if it is 10% lower in the afternoon, it makes me happy (and also a bit worried)!
In stock market
We don’t make money when we want. We make money when the opportunity appears, we are prepared for it and we eat the meat (buy or sell).