Market Opportunity: Buy The Fear & Sell The Noise

Market Opportunity:

Crashes equate to Market Opportunity:

After everything was said and done, if you had held onto your shares from the 2008 crash and then added more as the market tanked incrementally, you would have made a fortune ten years later.   Let’s look at some random examples. To simplify matters we are going to assume that one lot of each stock was purchased roughly at the highest price during the 2007-2008 top and an equal amount was purchased at roughly at the lowest price in 2009.  However, any person employing a bit of TA and Mass Psychology would have achieved a better average entry price, even though they did not purchase at the top or the exact bottom.

Financial Opportunity ; never follow the crowd

Market Opportunity: Appears When You Least Expect It

One look above fully confirms that stock market crashes from a long-term perspective represent buying opportunities, and this after the Dow has shed close to 5,000 points.  With Mass psychology and Technical analysis, we can achieve better entry points than those above. One of the reasons we are sure of this comes down to our policy of deploying 1/3rd of our funds at a time and using risk to reward models to help us gauge the optimum entry price. However, that is not the point right now; the point right now is assuming that you did absolutely nothing and purchased one lot at the top and one lot at the bottom, you would be far better off than allowing fear to enter into the equation.

The top players use words like a bear market, stock market crash, etc, to trigger a Pavlovian type reaction. They know when these words are used the masses will do precisely the same thing they have done for generations, sell everything and throw the baby out with the bathwater. What follows after that? Miraculously the markets start to bottom, and this is the same playbook that has been used over and over again.

Long term analysis indicates Stock market crashes equate to opportunity

stock market crashes equate to Financial opportunity

If one looks at the above chart, the stock market crash of 1987 appears like a blip and even the deadly crash of 2008, proved to be a buying opportunity. Pull up any long term chart and one thing becomes painfully obvious if you can determine the trend, a stock market crash is nothing but an early retirement gift from heaven. Buy the noise and sell the B.S. It is quite easy to spot bottoming action;  The masses are in panic mode and the markets are trading in the extremely oversold ranges. Opportunity knocks when you least expect it and it usually manifests itself in the form of a crisis.

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