[] Principles [] It's Not Magic -- It's a Skill...

Aristotle certainly had a way with words when he was quoted "We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Dovetailing off of this seemingly obvious yet profound observation, if you were to watch a child interact with the world, you would soon realize that every moment is a new creation. Believe it or not, but to them, they choose not to live in the past, hence, the lens through which they approach life is one of curiosity.

On the flip side of this and the one we tend to identify with most each day is the adult, who only sees what he doesn't have or hasn't been able to have, hold on to or successfully secure in life, thus bases all external stimuli around these shortcomings.

What does any of this have to do with investing you might be asking? It isn't until we begin to view the world from the perspective of possibility, as opposed to limitations that we are able to truly remain open to the reality that most everything in life is a skill.

Case in point, when a child is learning to walk and quickly stumbles to the ground in their many failed initial attempts, the last concern for them is whether anyone is going to judge them. Instead, they simply get up and keep working toward the proficiency of developing the survival skill of walking, running or simply getting to an erect state (a fancy way of saying "stand up")

Perhaps this is recondite or maybe if we all just got quiet for a few minutes a day we would have the potential to part our own red sea of "too busy" and see it for ourselves...a big if but I'm a hopeful optimist.

Enough philosophy, let's bring this to life with a couple of charts and see if it resonates with anyone...The chart below is an S&P 500 on a monthly timeframe. As you can see, its done an incredible job of describing the rhythm of the market.

Believe it or not, I've been showing this exact chart to clients and curious onlookers for close to a decade and very little has changed with respect to the original median line. Put simply, its the blue set of lines starting around 2003 capturing the 2007 peak and catching the 2008 crash low. Most people see it and think "wow that's amazing" then go on with whatever they were doing before and assume they could never leverage a tool like this.

If you are anything like them and have never seen a median line they are much less complicated than they appear. In order to create one, you take a low, high and a low or vice versa then using the original pivot point draw parallel lines forward (if that didn't make sense or you want to learn more go to www.medianline.com).

One more example for good measure and to solidify the original intent of this article. Take a look at the chart that was sent out to members last week on the 13th of November. This is a 60-minute chart of the S&P 500 and a classic example of how a big component of "the skill" needs to be earned because if you were told to stop asking why and simply buy the prevailing behavior you would be making money yet again.

If you don't think it can be this simple once you learn how to read the price of a market and understand a few basic principles of risk management than follow this thread that has had existing members collecting profits since early August of this year, https://www.principles1.com/blog/search/fire

As always, we wish you the best on your journey to becoming a more skilled investor.

Also, if you get a free moment this morning and you are curious, take a look at your potential bridge and what you would need to risk in order to realize it -- https://www.principles1.com/plans-pricing

56 views0 comments