A Reminder that Experience Matters
Hi ETF Yourselfers,
Emma here again. Rob is traveling this week, but hardly on vacation. My head has been on a swivel the last 36 hours between calls, texts, emails, not to mention IT troubles. And despite the reprieve we got today, I’m prepared for more swiveling. It’s got me reflecting on what I’ve learned over my tenure and the knowledge-transfer we aim to provide the ETF Yourself community.
1.) Skilled investors are forged in the crucible of sell-offs
Portfolio managers at my last job fell into one of two camps, those who had survived a market meltdown (or multiple) and those who hadn’t experienced one yet. What was the biggest difference between the two? Humility. Good PMs know that their first order of business is to manage risk, and a nice return profile is a plus. It’s not easy to sell. Human brains are more attracted to story telling around upside, not the daily work of avoiding catastrophe. The older I get, the more I want to surround myself with investors that have seen different variations of what we saw yesterday and what will come in the days, weeks and months ahead. It’s the only way I can accelerate my own learning.
2.) Volatility can beget volatility
You’ve probably read all the retrospectives of what exactly kicked off yesterday’s drop. It matters only in so far as what you choose to do moving forward. We’ve regained a lot of ground today, but that doesn’t mean the markets have fully digested what happened yesterday. It’s time to stay prepared for more volatility. If you haven’t yet internalized the concept of “vigilance,” the time is ripe. And if you haven’t read Rob’s post from last night, you should check it out. Most of it is still really relevant despite the gains the markets made today.
And now for today’s chart
I started my charting journey within the last year or so. And per Rob’s post last night, we live in a pretty binary world. What does that mean? A lot of charts look similar right now. I’m particularly struck by this SMH semi-conductor chart below. The last week has wiped out roughly 4 months of gains for this industry that has captivated investors over the last 18 months. If you read back to a post from about a month and a half ago, Rob covered what a parabolic chart looks like, though we hadn’t yet arrived to the right hand side of the chart that forms the outline of the Empire State Building. Well, SMH is charting its silhouette at the moment.
Below the paywall we will cover ROAR, as well as the 7-ETF portfolio.