Anything is tradeable if you want to try to trade it. Sometimes you win, sometimes you lose. It's only in the end that you know whether you did well, not the end of each trade but the end of years of trading. Buy/hold tends to work much better for almost 100% of all investors. But if you read financial MSM you will be led to believe otherwise. They always talk as if the real pro's make all their money by trading in/out of positions based on their superior knowledge of markets. But that is only true (in the aggregate) if you consider that market makers and their cohorts are the only true professionals. And the effect of all that misinformation is to help the market makers and their cohorts. Because they *are* Wall Street. They make billions by putting a tax on the retirement accounts of mom and pop Main Street. And, no, you can never become a market maker without actually joining the payroll.
Always take a big step back to look at market events such as the one we are going through. Realize that the single thing that has changed is what someone is willing to pay for a given asset right now. In the end these things always revert to the mean.
Business as we know it is not coming to an end. In fact, I believe we are in the early days of the age of technology brought about by mass connectivity (which has only been with us for barely over 2 decades) and other technological efficiencies that will grow to levels that are still unimaginable to many. Artificial Intelligence is already beginning to provide a real efficiency boost in many industries. Materials technology is growing faster than it ever has before. The price of robotics declines while speed and functionality increases. Same with computing. The net effect is more productivity with less effort. This means we are in a long-term period, a golden age for investors.
These things will continue to drive the economy and the markets forward. P/E ratios are climbing from their long-term historical norms of around p/e 12 for good reasons, one of which is better access to data. When you have more visibility into what companies and their competition is doing, when you have more confidence of exactly who each company is and what they are about, you are willing to pay more for future earnings. In the 1970's and 1980's it was not a simple or quick thing to get SEC filings. They had to be printed and mailed to you. Better dissemination of information about the companies making up the public markets make those companies worth more because people can better see exactly what they are investing in. Another reason for higher p/e's is the increasing scale and efficiencies of companies brought about by technology.
What we are seeing right now is just a short snapshot of market fear brought about by the need to periodically reset everything to prepare to move forward. Disruption brought about by companies like Tesla is actually a big reason why this is necessary! It's too bad it gets brought along for the ride but that's the way it works. Big money needs to periodically reposition themselves.
I am not a fan of alternating phases of irrational exuberance and irrational fear like this. I would prefer markets were more steady and more rational. But those in charge of MSM and Wall Street, big money and the Federal Reserve prefer it like this. This is their "tax" on the system. Even Elon Musk, arguably the wealthiest man in the world, is not part of this club - he prefers to make his money the old-fashioned way, by creating new value. Elon does not believe in the financial tax and does what he can to be free from the constant drain it imposes upon productive people. I prefer to make my money by investing in the growth of the companies supporting the markets, not the market action itself. Actual investing in good companies is hugely profitable without worrying about the market gyrations caused by fear and greed and that are always temporal in nature.
Remember this, if these gyrations were not temporal, you would not be safe from them even if you were 100% in cash. Because if these gyrations were not 100% temporal in nature, if business as we know it is coming to an end, you have a much bigger problem on your hands than the balance number assigned to your brokerage account. This is why I keep my eyes on the company and it' performance, not the day-to-day valuations of the company. The company is good and noble as it grows and expands, the markets are corrupt and greedy and very inefficient in the short-term.
