As Much Of 2020 That Fits On One Graph
As we start of 2021, it's a good exercise to think about what makes a good bet.

The image below shows "as much of 2020 that fits on one graph." When I look at this, I find it hard to believe that anyone would have been able to not just bet that a particular event would occur, but also when it would occur AND how the event would move markets- let alone be able to do this in a sustained fashion.

This is why I find it easier to bet on a quality company's performance over time, regardless of an individual event that moves markets for the day.

This mindset helps me filter out the noise, and focus more on competitive dynamics that can give a company (and me) an edge.

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Grace Gruber's avatar
This is AWESOME. Also, it's super interesting to see how some events barely had an impact (that we would expect to cause a big shift) and vice versa.
Nathan Worden's avatar
Exactly- this kind of graph is a great opportunity to stop and reflect on the fact that trying to trade on the news doesn't make a lot of sense.

Although- if there is a day trader out there who disagrees- I would love to know your process!
Amanda's avatar
The speed at which the market bounces back is a lot faster than the typical investor believes it is. I cringe when I think of the people that had stable finances yet sold in March. https://image.cnbcfm.com/api/v1/image/106413585-158281447337720200227_market_corrections_since_wwii.png?v=1582814489&w=740&h=416
Nathan Worden's avatar
Wow, just an average of four months to recover? That really helps make the point of just waiting out the dips.

Although I do remember thinking in March "So... if this ends up being like the Great Depression, then it will take about 12 years to come back"

...that was a bit more daunting of a timeline haha. But I still kept investing! The perks of having a long time horizon :)
Amanda's avatar
We’ve hopefully (?) gathered some lessons learned over the last 100 years and regulated accordingly to prevent major economic mishaps. But tbd, you hardly see it coming.
Josh Worden's avatar
This makes me feel better to say “I don’t really know what’s going on or what the market is going to do!” and the not-so-secret-secret is... nobody really knows 😯

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