Thread by @mikeharrisNY

Thread 🧵about the market.

1/n Family, friends and some followers ask me where I think the market is heading. Some are bulls, others are bears. It's a good question. Here is my answer. I have no freaking idea. $SPX $SPY $NDX $QQQ #ES_F #NQ_F

2/n Maybe I'm not as smart as some gurus who predict a rebound to new highs, or some others who think this is going way lower. Or, I have learned my lessons. This is what I mean.

3/n During the dot com bear market, after a 20% drop I thought the market was going to rebound. I didn't lose much from trading, I lost from my stock portfolio. Because after it dropped 30%, I sold in panic and took the loss. I didn't add when the market bottomed in 2003.

4/n I thought this was a temporary bottom and didn't take advantage of the 2003-2007 rally to break even. Then the market collapsed in 2008 and I lost any confidence in passive investing without proper risk and hedging. But I learned the lesson.

5/n The losers are those who hold strong views about market direction. The winners are those who are agnostic and wait the proper time to pull the trigger. I see many holding strong views now. This is a rudimentary mistake IMO, regardless of direction.

6/n There are actors in the market, some very powerful, some good and some bad. Most of you know who they are. You never know when they will decide to go on a shopping spree and invalidate all the fundamentals and technicals. They don't care. They know stocks go up in long term.

7/n Most powerful actors with large AUM or personal wealth don't give a damn about drawdowns. Their long-term goal is to buy cheap the shares the retail bought at high prices. They enjoy this. This is their game. It's a tricky world out there. Very tricky.

8/n When I traded for a hedge fund during the 2008 crash, I had no market view. My plan was many positions with small risk and total portfolio heat of no more than 2% at any given moment. I ended 2008 with a small profit, nothing to brag about but not with a 50% loss.

9/n But trading for a hedge fund I would never do again if I had to justify every position to the managers. It's a waste of time. I wasted more time justifying the signals than generating them with my programs (data-mining). Either you do it for yourself only or not at all.

10/n I have no view about the market because I'm not the one who determines the direction and those who do won't pick up the phone or tweet. I'm surprised some people who are supposed to be experienced have strong views about market direction.

11/11 As I wrote in a book many years ago, every point on a trend, up or down, is a potential level for reversal. Trends are known only in hindsight. No one knows where the market is going to be at the end of the year and IMO those who think they do overestimate their abilities.