Discussion about this post

User's avatar
sandimas's avatar

The reason I use shorter time frame trendlines is because there are always waves in price movements, but there are not always long up trends like 2023 or 2021 where you can just walk away and let it grow. I want to regularly compound my investment and not depend on a bull market. I also want to avoid trading the inverse ETFs. Years such as 2000, 2001, 2002, 2005, 2008, 2011, 2015, 2016, and 2022 offered very little in terms of easy long trend lines. But there were several waves to be played. Buying and selling TQQQ during these years could have made > 100% profit while TQQQ was flat or -90%.

2023 should have been an easy year. It was the best year for TQQQ and TECL ever - even if you just bought and held for 1 year it was +200%. That almost never happens, and it would be foolish to think it can be repeated again in the next year.

Expand full comment
sandimas's avatar

I said I would have many comments...

It's great that you don't need to study hundreds of companies looking for promising growth opportunities, or worry about what might happen to these companies every quarter when earnings are reported. Because as much as you study and prepare for this, there is no guarantee the stock will even move in the logical direction following good or bad news. People say fundamentals matter eventually, but then you wait 3 years while the stock continues to slide down. Meanwhile you are wasting time waiting and could have been trading, compounding gains.

Generally when people buy individual stocks and the price goes down, they buy more because it is a better value. The author has written about this dollar-cost-averaging strategy or buy-the-dip which is a complete fallacy. Just look at a stellar company like PFE. The stock price peaked in 2000 then fell for 9 years. It didn't recover until 2021, and has again been falling for 2 years. Should you have bought the dip in 2022, or 2023? Well can you imagine buying the dip in 2001, 2002, 2003, 2004, 2005 (when is this going to end?) 2006, 2007, 2008? At some point you are out of money to buy the dip.

Instead, learn to sell losers at the first sign of trouble (trend break) and move on to something else. Or be willing to buy it again later when it breaks the down trend.

Expand full comment
12 more comments...

No posts