In Markets, All That Matters Is What’s Next

Three things about markets I’ll never forget:

  1. It’s way too easy to say things like “I should have sold here!” or “Wish I did that!” but by the time that thought arrives, the market has moved on. So it’s paramount to learn how to move on with it and not get stuck in the past, wishing you had done something different.

  2. Markets don’t seem to care about personal opinions or desires or hopes or aspirations. They just do, they just exist – millions of people interacting at once, by the minute, day, week, month.

  3. The market never looks backward. It never asks why something happened, it’s actually already three steps ahead. It’s only asking what is going to happen next, looking forward, constantly repricing itself for a potential future outcome.

I have personally found that the three things above are timeless reminders. They have never lead me astray and keep my outlook realistic. Otherwise it’s too easy to get swept up in mania or FUD.

There have only been a few broad market corrections since the Covid pandemic, but at each one, there is a chorus of people asking and explaining what happened. The problem is, by the time you figure out what happened, the next move has already been made. As of this writing, the market is in a small correction:

But the bigger story is the bear market happening for individual stock pickers. Under the hood, individual stocks are getting destroyed. I can only remember a few times in my career that this much individual carnage occurred:

A lot of stock pickers in the most popular companies, the gurus and the furus, have been wiped out in just a matter of weeks. Zoom, Palantir, Peloton, Twitter, and the list goes on. There are 30%, 40%, and even 50% corrections in all of these names.

For me, a moment like this is when I start to think about what I want to do next or watch more closely. Why and how is over. All that matters is what’s next. I don’t like to publicly share anything I do with my portfolio (besides when I joke about being a bag holder) because I’ve learned how unfair that is. People need to make their own decisions. The point of this post is to highlight how interesting the current market is becoming compared to its usual “melt up.”

Thanks for reading!