It Is Not About Being Right

I like being right and appreciate it when people recognize my analysis was correct. Raj Patel (@Indiantraveler above) and I exchange pleasantries and banter on Stocktwits like this a lot. If you have ever noticed that I don’t always respond to these and your comments it is precisely because it

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is not just about being right. Those that understand my process know I look at over 1000 charts every weekend, post about 50 ideas to twitter and Stocktwits that may play out or not, and keep my best ideas for my clients. Understanding that process I should be right a lot of the time, if you are only seeing 50 out of the 1000 looks I see. I often don’t respond though because being right is not enough. You probably also notice that I rarely take trades in those 50 names. My focus is on the smaller Top 10 list and a couple of daily additions.

Don’t take the title the wrong way. It is always better to be right than to be wrong. Being right gives you a head start. Being right feels good. But this game is about making money. You can be right every time and still not make money. Either you are right and do not take the trade like those above. Or you are right and botch the execution or place a stop too tight. Maybe you were early and did not give it enough time before giving up. Maybe you were in the bathroom when your target was hit and you did not exit when you should have. There are a lot ways you can be right and not win and almost as many ways to be right and lose.

I do not analyze stocks to see how many times I am right. I do it to make money. So if you are inclined to send me a nice note thanking me for an idea where I was right, know that I do appreciate it, but don’t be offended if I don’t acknowledge you. More importantly, if you executed the idea and made money realize that you were right too and you made money. So bigger congratulations to all of you. You realized the goal!

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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