They say a bullmarket has to ‘climb a wall of worry’. Well, you might get another 1000 points on the ASX with all my worries!
Having endured the GFC at a full-service broking firm – watching clients’ blue-chips get whacked 50%, major property trusts go broke, speculative shares go down 95% and living blow-by-blow through the years of multiple Euro-crises that followed and beyond – well, it seems I may be a bit more negative than I should be. Maybe.
My therapist (although she’s most likely just a voice in my head) has recommended that I write down some of my concerns, and then I may see whether I am just focusing on the negatives – in and amongst a sea of positives. And she is worried that I am leaving cash on the table by not running with the bulls. Even my imaginary therapist is not cheap – nothing but the best in a bullmarket!
I’ve been through four bear markets now and I’ve noticed that they always seem to come straight after bullmarkets. Isn’t that crazy…
So maybe I’m in need of some perspective and shouldn’t have all those geared-bear-ETF’s in my portfolio. Even just a mild sell-off would make me feel a bit better, a bit of sanity returned (plus I’m underwater on the damn things and wouldn’t mind getting them back nearer the black).
As traders or investors we are supposed to be focused on the future, not what is happening right now, or what has happened. We are also supposed to learn from the past, even if it isn’t always a perfect indicator of the future. There are a lot of things happening now that I haven’t seen since 2007, but maybe I’m just looking for the signs and perhaps I’ve got the dreaded ‘Bear-Bias’…
So far this financial year I’ve made 53 share trades – only 3 of them were negative, and each only slightly. I’m making more money as a trader than my salary (and I’m a CEO!), but that hasn’t been uncommon for most of my trading life and I offset it by spending a LOT more than I make (and I even underpay myself, just to make this story work). The universe balances itself.
Luckily it is part of my literal job to make sure our trading platform works properly each and every day and is set-out the best way it can possibly be, so I have to use it. And it is fabulous in this sort of market, especially when our trading platform is, hand on heart, the best one in Australia.
Don’t get me wrong. I’m loving this seemingly endless rally – and the Passat will probably get a buff and polish soon, perhaps even an oil change – but it all seems a bit too easy…
So here’s a few things from my list of worries:
There are now over 53,000 people just on one Facebook stock-tips page saying things like “I bought CSL and I’m down 10%, should I sell it out and buy Brainchip for the long term.” And people saying yes. Unironically.
The AFR has a regular ‘Millennial Investor’ section and its seriously about Millennials for Millennials. Classic.
SBS News did a news piece on the reddit thread r/ASX_Bets. (I didn’t watch it because I was worried the last actual-news program left in the world had finally sold out)
The AFR even did a piece on, and I’m paraphrasing; ‘Men’s Fashion for the new Millennial Billionaire’. Conspicuous consumption hasn’t been cool since Lehmann Bros and I miss it, its good to see them bringing it back!
HotCopper (sorry, The Market Herald) is worth $100m. And they have turned a chatroom selling banner ads into a small-cap resources fund that funds a PR/media company to promote those stocks and now they can even raise capital for the companies they promote/own to help them pay for the PR, and they can participate in the raise! Is this the ultimate perpetual motion business? (A: No, I think there’s another word that’s a bit closer, sounds a bit like a character from Happy Days.)
Lake Resources (LKE.ASX), one of the most over-promised & under-delivered companies since 2001, has hit all-time highs with its latest play, lithium. In May 2015 you could have had your fill at 0.1c when they were exploring in Pakistan for copper or something, now they are over 30c a share.
Oooh, nearly forgot! Adultshop is now called Delecta (DLC.ASX), and the meme-kids love that it uses its dildo revenues to fund gold exploration. (Or did they get the old original-and-best pump and dump gang back together to make the memes..? We’ll find out soon I guess!)
The ASX is constantly ‘pausing trade’ on shares that have gone up for no reason, and are yet to officially determine how or why it is happening. Hmm, real head scratcher…
There is a shell company on the ASX (one with no assets or cash, and lots of losses) worth $5.5m.
There is an exploration company in WA with a nearly $2 billion market cap, yet to define a mineral resource, that sits under a beloved state forest that Perth sources its water from. (I wish them well in getting that environmental approval. We have a lot of hippies over here, couldn’t even get a new truck road to our port to get them off the suburban streets.)
An overseas fund (that sounds like an evil Marvel organisation) is trying to take over Crown Casinos.
Banks have started taking over their ‘disruptors’ and everyone thinks that’s good. (Over here douchebags I mean daddy!)
People cheering for the downfall of evil hedge funds and the rich people who benefit from them manipulating the market, when they themselves are just trying to get rich by manipulating the market.
People who believe silver will get a short-squeeze because there weren’t any novelty silver bars left at the place that sells novelty silver bars when they went to buy some (in their tin-foil hats).
People are starting to discuss bitcoin like it is a genuine asset, and its price is now being quoted alongside the Dow Jones in Morning Summaries.
Spec stocks being called ‘a long-term hold’ by people that have been investing in shares for 6 months.
‘Uber-but-for-dogsitting’ was a recent IPO. So was ‘Gumtree-but-just-for-Bike-parts’.
Revenue numbers are once again more important than making profits, but it is “different this time”.
Speculative stocks being called ‘cheap’ when they drop 30% after running up 2000% for no fundamental reason.
But, my all-time bullmarket favourite…personalized number plates with stock codes on them.
(No, that’s not a Passat. Just a cheap-ass Golf. Pfft.)
So let’s get back to my exemplary 50/53 trading record for the 2020/21 year so far. Even if I had just used the dartboard I would have done very well – or, even if I’d just taken meme-tips off the chatrooms! Because that’s how bullmarkets work.
Any stock with half a cool concept that resonated with inexperienced investors has had its time in the sun – “what, a chip that learns..?!”, “a new type of borrowing that’s instagrammable..?!”, “lithium because Elon tweeted..?!!!!”.
Here’s another stat that may surprise you – I only traded 8 different shares and two of them were IPO’s that I stagged out (for at least double the IPO price) and two of them were bear-ETF’s. None of them are cool disruptors (whoa, disruption…they’re disrupting…whoa, that’s disruptive…), none of them get mentioned much in the chatrooms, none of them have ever had a meme made about them! I follow more stocks just because my mates are trading them (and just because I want to see how wrong they are and then bag them out) than I follow myself.
And to look at the stocks I traded you’d say they weren’t going anywhere. They certainly haven’t knocked out the lights as a buy and hold; I’ve just knocked out the lights using them. Because Susan, they only need to go up a bit, and then down a bit, because my brokerage is only $5 a throw! I’d much prefer a fundamentally strong yo-yo than a fundamentally weak rocket. (I’m going to trademark that line so don’t steal it)
But it’s during a bullmarket that the serious trader transfers their shares into the hands of the foolish, via the stockmarket. Like Kerry Packer did to Alan Bond. You need to be taking it seriously and constantly looking for your sucker, so you need a proper live streaming data-link to the market to see them as they herd.
The only thing that would make this market scarier for me would be if I wasn’t using a trading platform.
When you’re looking at your choice of broker, just be aware that their standard package isn’t a trading platform. Even Commsec, the biggest of the lot, isn’t a trading platform – Commsec-IRESS is though. Everything else is just a website with stock prices on it.
Except Marketech Focus of course, the all-in-one trading platform for serious traders. Or traders who know they’re going to have to start taking it seriously soon, but don’t want to pay top dollar for IRESS Viewpoint (which is pretty crap anyway) or have to read a book learning how to use it.
It’s a bit like thinking you’re a great driver because you have a car. You probably picked it because its cheap to run, but it looked sporty. Then after the first lap along comes Danny-Ricci in a Formula One McLaren and you soon learn that to be a consistent winner you need to have something better than a second-hand beige Passat.
You’ve made all this money, had the greatest trading year you’ve had in recent memory – or you should have. Surely its time to put a few moments into viewing the newest tech, and a proper trading platform to replace whatever old website you’re using. You don’t see the pro’s clicking to refresh their trading webpage. But you do see them being rich.
Luckily for you, we’re a McLaren with a Passat price-tag.
(There is only one last thing that has coincided with the biggest sell-offs in my living memory. Me buying an expensive new luxury sports car. So when I start looking I’ll make sure to lodge the notice with the ASX so you’re all fully informed. The last one was so nice that it caused the GFC…so I drive what I drive, for you, the people…my future Marketech people…)
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