I read a lot of investment articles, blogs and newsletters just to see what others are thinking.
I read one today by a pretty well known guy that mostly does angel investing; early stage start up capital. He is very involved in the public investment community as well.
He said he has gotten killed this year with his investments in LULU, Lululemon Athletica Inc, and UA, Under Armour Inc.
He explains his investment thesis in these “fashology” companies with a lot of fundamental conviction even though he has lost 40% to 50% of his money.
No thanks Howard, I’ll pass.
I just don’t understand how such a smart guy can not know when he is wrong. Maybe it’s his ego. Maybe he doesn’t understand the basic tenet of investing in public companies: manage your risk and let your winners run, not your losers.
Let’s look at a couple of them.
Lululemon Athletica, Inc (LULU) weekly
When price failed at resistance in September 2016 why would anyone continue to hold it? I’ll tell you why…he doesn’t understand the power of technical analysis. He got stuck on his opinion.
Under Armour Inc (UA) weekly
Same thing. Why on earth would he buy this? It’s like the game Shoots and Ladders…this is a Shoot. Down, down, down…bye bye.
Moral of the story…Don’t Fall in Love with Your Opinion.
It’s really important to know when you are wrong. It’s more important to act on it. Let price action be your guide, not your opinion.
This is a hard lesson to learn.
Market action was sideways last week. No worries. Continue to hold open positions.
Trade Smart,
Don