The Pitfall of Feeling Like a King
Thursday, December 16, 2010 at 11:00AMLast weekend I updated my wealth spreadsheet and I felt like a king. It reminded me of days when as a teenager selling knickknacks on the street of La Tuque I would go home at night counting my bounty countless times, even smelling it. Hey, money smells better than the local paper mill.
For capitalists money is a way to keep score and man does it feel good when the magic Excel grand total cell updates to a new all time high.
My excitement lasted a brief moment though as I reminisced about how different I felt during the bear market of 2007 and 2008.
In late 2008, I went kiteboarding with a very successful friend of mine who told me before we hit the liquid for a sick session that he had suffered major losses in his investment portfolio. He was considering going back to work to refill his money tank. Ouch!
Our investment portfolio suffered as well. However, following the sage advice of Shelby Davis, I bought stocks with both hands.
“Bear markets make people a lot of money; they just don’t know it at the time.”
–Shelby Davis
The action I took then drove the magic Excel cell all the way to a new all time high. For investors, it is the actions taken then that are making money now.
What should we be doing now? The way I go about answering this question is to flip Davis’ statement on its head:
Bull markets lose people a lot of money; they just don’t know it at the time.
I guess this explains why I recently tweeted this —@biggercapital: I will probably be miserable for the next two years. All I want to do is sell $$
Feeling like a king makes me real nervous. I never make money one or two years down the road when I feel like that.
Are you feeling the effect of the magic Excel grand total cell?
Written by Michael Bigger. Follow me on Twitter and StockTwits.
Reader Comments (2)
La Tuque looks nice and peaceful town. My kind of town. Grew up in a small town in the Philippines. Very green, farmlands, fresh air hmmmm!
Yes, I had a great time growing up there.