What We're Reading

Intellectually I knew there were two forms of market participants already: price-sensitive “investors” and price-insensitive “traders”.  The former buys low and sells high, and has a process for determining why they are doing so.  The latter sells low and covers lower, or buys high and sells higher.  Both are entirely legitimate ways to make returns in any market, but it’s important to distinguish between them; who you listen to and surround yourself with will inform your market view and trading positions.  When the stock market opened for its “Black Monday” on August 24th, those selling were “traders”, whether they want to admit it or not.  They didn’t care what level prices were at, just that they were going down. “Get me out, NOW!!!”  Those who were in buying blue chip, mega-cap, high quality secular growth stories at 10 or 20% discounts to that day’s close? They were investors.  More on this below, but when you’re in a crash, make sure that you’re not trying to inform investing dec