Tops, Bottoms & Middles

Tops are a process, Bottoms are an event and Middles are a motherfucker.

Because when you’re not at a top or at a bottom, but somewhere in the middle, you spend the bulk of your time worrying about which one of those two you’re closer to.

Market-timers don’t live long, it’s a horrible existence.  My friend JC likes to say picking tops and bottoms is the most expensive job on Wall Street.

A lot of the media’s time and attention is spent discussing whether or not something is bottoming (housing, stocks, consumer confidence, ratings, etc) or topping (tech stocks, valuations, bond prices, sentiment).  It’s great conversation but not helpful.

Because most of the time things are not bottoming or topping.  They are middle-ing.  They are churning or they are trending.  Most of the time there is no inflection point at hand – these are rare occurrences.  So to focus on them to such a great degree is probably a distraction and definitely a waste of time.  And energy and emotion.

Think about the middle.

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This post originally appeared in May 31st, 2012