A pretty well-respected guy once told me -- "Sometimes you can make solid gains by finding a bad trader to fade; he does all the research and you just take the opposite position." For educational purposes only, what are some attributes you noticed in the thought processes of ppl who tend to recommend losing trades (more often / more in $ amt than their winning trade recommendations)? A few commonalities seem to surface, - Bottom-picking based only on comparison to prior price - eg. Brand name company has stock price marked down by a lot over short period of time due to deteriorating fundamentals, trade recommendation of going long because price is at "discount" compared to previous high levels; would stand to "make a lot" if price climbs back - Getting investment thesis sidetracked by minutiae of detail that is not a major price driver for investor base in that particular stock -- eg. Recommending being long a retail stock due to 'upside catalyst' of expanded product offerings yet to be released, but investor base in that stock has focused their attention / scrutiny on erosion of distribution pipeline, low free cash flow - Recommend putting on a long trade just when price has surged to such a point as to make the long idea 'speak for itself' -- usually the trade would have worked out well had it been entered earlier, but at the time of recommendation, the price move is so mature that it's virtually right on the cusp of a pullback Quite a few stories like these come to mind, but no specifics due to anonymity... Anyone else observed similar things? What are some commonalities you've encountered among ppl whose trade recommendations you know it'd be wise to not heed / even profitable to fade?
Dennis Gartman - if prices rise today, he finds reasons to justify being bullish tomorrow. If prices fall today, he finds reasons to justify being bearish tomorrow.