I told someone recently that what I like about investing is being correct. It is watching a thesis play out and my conviction being rewarded. The other side can be a little painful and because I would rather take small losses to get to a large payout being wrong can stack up quickly and be a little painful, but I am both a DC sports fan and an ARPG fan. I am accustomed to the pain.
Today I might get to watch my correctness grow. There is still no guarantee of that. Even after the Nvidia earnings call, overnight, and premarket moves all going in my favor with three hours to go until market open strange things can happen. I am a DC sports fan. I was at Game 5 in 2012 and still curse the name Pete Kozma at least once a week.
I know pain, but I am also coming to understand a simple truth about investing. Most people don’t know they’re people. Or they don’t know the pitfalls of being people and investing like people. That makes a stampede far more likely than a retreat this morning. The event everyone was waiting for happened and this morning is their excuse to buy.
I have no idea how Nvidia did on something like the Kospi or Euro markets but I imagine it wasn’t bad. The buy signal went up and overnight and premarket responded. We will see what force wins out. Cashing out or buying in. My guess is buying in because the stronger narrative leading up to the event was the Nvidia always beats and always falls. All the people that planned to buy at $195 this morning could be double screwed if they don’t pile in at $225.
It is hard to say what is going to happen or how people are going to behave even if we understand the patterns. The same event can be read in multiple ways and in different timelines turn out different. What isn’t hard to say is how people will behave based on the actions of other people. Going against the crowd feels wrong, and that is because at one point in our existence it meant death, and a lot of time the crowd is obscured from us. In this case it wasn’t.
This time the crowd was in our face screaming on social media how it must behave, and everyone piled in and followed the crowd in pre-selling the stock before earnings leaving it little choice but to go up, and when it dropped right after the announcement I have to admit my first reaction was, “I should just have this money in a CD,” but then boom goes the dynamite, and this morning could be fun or it could be an exercise in wondering how wrong I am once again, but right now I feel good and hopeful I feel even better later today.
David Huzzard Writes 