Mon 17 Apr 2006
Don’t fear that you’ll miss anything
James Cramer has an investment book Sane Investing in an Insane World. He has 10 investment commandments, command 8 is: Don’t fear that you’ll miss anything. It makes sense and it is probably true.
“We always fear that we will miss the next move. Those fears are wrong. Sure there are moments where the train genuinely feels like it is leaving the station without you. But you know what? I have been trading for 25 years, and believe me, there is always a train behind that last one,� says Cramer. “If you feared missing the next move in oil, you might have bought at just the wrong time. We have seen it happen endlessly in tech over the last few years.
“One company would report a good number, and the market would take up all other tech stocks without thinking, including those of companies that this one company was killing! That was the fear instinct at work again. Invariably, people who acted on it lost money. What I like to tell myself is, ‘OK, I missed that one. I should have bought it yesterday. Now, rather than play catch-up, I will just work harder to find the next one.’ Control your instincts. There is always another train. Never forget it.