Last week my friend Joe Fahmy broke with many of his fellow momentum players and announced a move back to cash. After having played the “inconceivable rally” like a Stradivarius, he had seen all the signs he needed to that the tone of this tape may have changed. Joe’s discipline allows him to only play when conditions are favorable for his style – none of this nonsense about “I need to put some money to work”.
This morning he reminds us of his current posture:
NOW IS A VERY CRITICAL TIME! SHOWING PATIENCE AND DISCPLINE DURING THESE TIMES IS WHAT SEPARATES GOOD PERFORMANCE FROM BAD! IT’S THE DIFFERENCE BETWEEN THE AVERAGE TRADER WHO MAKES MONEY IN AN UPTREND (ONLY TO GIVE IT ALL BACK DURING A CORRECTION) AND THE SUPERIOR TRADER WHO MAKES MONEY IN AN UPTREND AND KEEPS IT!
Joe defensive heads up has been a winner thus far. What’s cool about paying attention to guys like him is that he’s nimble; he’s a trader, not a forecaster, so it’s not about being publicly “consistent” on something he said two months ago, it’s about being right and making money.
Traders > Pundits
Remember that equation, I know both traders and pundits – guys like Joe put the guys with the publicists and booking agents in the dirt.