Stock Market Crashes are associated with Panic and Fear
One should never panic for as we have repeatedly stated once you panic the outcome is always negative. The long-term chart of the Dow clearly illustrates why stock market crashes are nothing but buying opportunities in disguise. What the masses fail to understand is that when you feel good about investing in the markets, the markets are usually dangerously close to experiencing a massive correction. One has to go against the crowd if one expects to succeed in the markets. There is no such thing as teamwork when it comes to stock market investing; teamwork does not pay and will ensure that you are always rewarded with a solid kick in the head. The masses cannot win as there is not enough money to go around for everyone.
Panic is for Fools; never panic even if the Stock Market is crashing
As we have repeatedly stated over and over again, panic is for fools; panic is for individuals who refuse to learn from history and who only love to lose. What you need to understand is that there are three phases in the markets; there is a time to buy, there is a time to sell (close your positions), and there is time to sit in cash (cash is a position) or if you are an aggressive trader, you can short the markets.
It is easy to determine what stage of the game you are at with a little practice; we are talking about determining the general stage, narrowing the dates down to a few months and weeks, you need to have a good grasp of mass psychology. The only way to better understand MP is to understand and accept that fear is a useless emotion. It is one thing to mouth the words; it is an entirely different thing to stare fear in the face and say go away you bore more.
When there is blood in the streets: buy quality stocks as if the world is going to end
In general, when there is blood in the streets it is time to buy; you will not get in at the bottom, but in the long run, you will walk away with huge gains. When the masses are euphoric is it time to go into cash if you are conservative. If you are going to short the markets, then you need to improve your understanding of Mass Psychology and trend analysis.
The above chart illustrates that as long as Fiat is in play; all market crashes from a long-term perspective can be viewed as buying opportunities. In future updates (maybe the next one) we will zoom in a bit and look at specific time periods more closely.
Random thoughts on Stock Market Crashes, Panic and Investing
Today everything is interrelated; we do not have free market forces anymore. Everything is manipulated; from the food, you eat to data you are provided. If you are aware of this, you can plan accordingly. Identifying the problem is over 80% of the solution, and this is why most people do not know what to do because they do not understand the problem. Now you know why we are one of the few websites, if not the only financial website that covers such a wide array of topics that on the surface appear to be unrelated but are in fact, deeply interwoven. Mass psychology is a very powerful tool, and if employed correctly it can help you spot the abnormal levels of manipulation, the masses are subjected to. It would be a good idea to familiarise yourself with the concept of “ Plato’s allegory of the cave.”
If you seek freedom, the 1st task is to attain financial freedom so that you can break free the clutches of the top players who strive to enslave you. They want you to run in a circle like a hamster that runs on a spinning wheel; the hamster thinks the faster it runs the further it will go, but sadly it is going nowhere.
We teach how to use Mass psychology to your advantage, how to view disasters as opportunities and how not to let the media manipulate you and direct you towards actions that could be detrimental to your overall well-being. Visit the investing for dummies section of our website; it contains a plethora of free resources and covers the most important aspects of mass psychology.
Secondly, subscribe to our free newsletter to keep abreast of the latest developments. Change begins now and not tomorrow, for tomorrow never comes. Understand that nothing will change if you do not alter your perspective and change your mindset. If you cling to the mass mentality, the top players will continue to fleece you; the choice is yours; resist and break free or sit down and do nothing.
Other articles of interest
America’s 21st Century Energy Story ( Feb 10)