Difference between revisions of "Mass Psychology Contrarian investing strategies to becoming rich in the Markets"
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| − | Mass Psychology<br>Mass psychology is the constant analysis of the playing field to determine how the game is being played.<br>Are the rules changing, are the players become more aggressive or docile, is the playing field soft, rocky or worse yet on extremely high and treacherous ground. One has to take measures at different levels and then compare it the pattern you have already established from past observations.<br><br>In this sense, mass psychology is dynamic compared to the methodology most contrarians put into play. Contrarians do not measure their position relative to those of other contrarians; they only measure their position relative to that of the masses, and therefore, they fail to obtain a vital piece of data.<br>This usually results in pain, misery and taking on substantial losses. In, other words; they do not measure the intensity of emotion in their camp.<br><br>Mass psychology takes the principle of contrarian investing and then pushes it to the next level. Doesn�t act like a lemming; that�s something you need to master if you want to apply the principles of mass psychology successfully? Students of Mass Psychology look for extreme type situations.<br>In other words, sentiment should not just be bullish before an opposing strategy is put into play, it should be at the boiling point and only then will the student of mass psychology look for an exit and attempt to take an opposing position to that of the masses.<br><br>To illustrate this point, we will use the following example.<br>The commodities sector has several components to it, two of them being the Gold and Silver. Throughout 2002 and early 2003, the hate and disgust for both these sectors were extremely high. Fast forward to 2004 and Gold was being | + | Mass Psychology<br>Mass psychology is the constant analysis of the playing field to determine how the game is being played.<br>Are the rules changing, are the players become more aggressive or docile, is the playing field soft, rocky or worse yet on extremely high and treacherous ground. One has to take measures at different levels and then compare it the pattern you have already established from past observations.<br><br>In this sense, mass psychology is dynamic compared to the methodology most contrarians put into play. Contrarians do not measure their position relative to those of other contrarians; they only measure their position relative to that of the masses, and therefore, they fail to obtain a vital piece of data.<br>This usually results in pain, misery and taking on substantial losses. In, other words; they do not measure the intensity of emotion in their camp.<br><br>Mass psychology takes the principle of contrarian investing and then pushes it to the next level. Doesn�t act like a lemming; that�s something you need to master if you want to apply the principles of mass psychology successfully? Students of Mass Psychology look for extreme type situations.<br>In other words, sentiment should not just be bullish before an opposing strategy is put into play, it should be at the boiling point and only then will the student of mass psychology look for an exit and attempt to take an opposing position to that of the masses.<br><br>To illustrate this point, we will use the following example.<br>The commodities sector has several components to it, two of them being the Gold and Silver. Throughout 2002 and early 2003, the hate and disgust for both these sectors were extremely high. Fast forward to 2004 and Gold was being mentioned everywhere; even CNBC had a little ticker that stated what the price of Gold was throughout the day.<br><br>The hate or disgust for both these sectors was no longer there, and even though both these sectors have a long way to go before the masses fully embrace them, they did not provide a psychological basis for taking an opposing position to that of the masses in 2004.<br><br>Gold went on to soar to untold heights, heights that most would have deemed impossible in 2003. All along the way we continually stated that Gold would continue to trade higher and higher until 2011. We warned our subscribers to bail out of Gold very close to the top.<br><br>The gold bugs are a classic example of contrarian investing gone wrong. They moved from the Euphoric phase to the having found religion period, to the [http://www.renewableenergyworld.com/_search?q=gnashing gnashing] of teeth and pure misery phase, as they watched Gold plunge from 1800 ranges down to the 1000 ranges. They still cannot fathom why this happened, especially as trillions of more dollars have been created since 2011.<br><br>The Internet boom lasted one-year longer after all the TA and contrarian indicators were in the extremely bearish zones. Euphoria for this sector was running sky-high. If one had shorted the markets based on these contrarian factors only one would have lost one�s pants and well as underwear.<br><br>In other words, you would have most likely lost a small fortune.<br>Gold bugs should have banked some of their profits. Instead, they continued to [http://Www.google.co.uk/search?hl=en&gl=us&tbm=nws&q=plough%20money&gs_l=news plough money] into Gold, and as it pulled back, they jumped in joy and added even more. Once the correction moved from the mild to the wild phase, they panicked and started to pray. Today the sentiment is almost as bearish as it was in 2003.<br><br>From a long term perspective, a great buying opportunity could be at hand.<br>Most pure contrarians were caught flat-footed when the Equity markets mounted this huge rally from Oct 2004. Their contrarian indicators suggested that taking a short or neutral position was the right thing to do. Only 10% of the investors can win at any given time.<br>contrarian investor surges past this level (no matter what side of the fence they are on contrarian or the masses side); the markets will adjust to [http://dichvulamvisahan.blogspot.com dich vu visa han] bring this ratio back to its norm.<br><br>Investing based on psychology amounts to not only taking a position against the masses but also against the fashion contrarians. Once sentiment has reached the boiling point, one should go into cash; risk takers can consider shorting the markets. Finally, less attention is being given to the precious metals sector, so establishing a position now could be viewed as a prudent long term investment.<br><br>On the same token, most investors and experts expected the Market to Crash after Trump won and we stated that it would create a buying opportunity just as Brexit did. In fact, since 2013 we have been stating that a stock market crash was a long way in the making and that all strong pullbacks should be viewed through a bullish lens. |
Revision as of 10:58, 21 October 2018
Mass Psychology
Mass psychology is the constant analysis of the playing field to determine how the game is being played.
Are the rules changing, are the players become more aggressive or docile, is the playing field soft, rocky or worse yet on extremely high and treacherous ground. One has to take measures at different levels and then compare it the pattern you have already established from past observations.
In this sense, mass psychology is dynamic compared to the methodology most contrarians put into play. Contrarians do not measure their position relative to those of other contrarians; they only measure their position relative to that of the masses, and therefore, they fail to obtain a vital piece of data.
This usually results in pain, misery and taking on substantial losses. In, other words; they do not measure the intensity of emotion in their camp.
Mass psychology takes the principle of contrarian investing and then pushes it to the next level. Doesn�t act like a lemming; that�s something you need to master if you want to apply the principles of mass psychology successfully? Students of Mass Psychology look for extreme type situations.
In other words, sentiment should not just be bullish before an opposing strategy is put into play, it should be at the boiling point and only then will the student of mass psychology look for an exit and attempt to take an opposing position to that of the masses.
To illustrate this point, we will use the following example.
The commodities sector has several components to it, two of them being the Gold and Silver. Throughout 2002 and early 2003, the hate and disgust for both these sectors were extremely high. Fast forward to 2004 and Gold was being mentioned everywhere; even CNBC had a little ticker that stated what the price of Gold was throughout the day.
The hate or disgust for both these sectors was no longer there, and even though both these sectors have a long way to go before the masses fully embrace them, they did not provide a psychological basis for taking an opposing position to that of the masses in 2004.
Gold went on to soar to untold heights, heights that most would have deemed impossible in 2003. All along the way we continually stated that Gold would continue to trade higher and higher until 2011. We warned our subscribers to bail out of Gold very close to the top.
The gold bugs are a classic example of contrarian investing gone wrong. They moved from the Euphoric phase to the having found religion period, to the gnashing of teeth and pure misery phase, as they watched Gold plunge from 1800 ranges down to the 1000 ranges. They still cannot fathom why this happened, especially as trillions of more dollars have been created since 2011.
The Internet boom lasted one-year longer after all the TA and contrarian indicators were in the extremely bearish zones. Euphoria for this sector was running sky-high. If one had shorted the markets based on these contrarian factors only one would have lost one�s pants and well as underwear.
In other words, you would have most likely lost a small fortune.
Gold bugs should have banked some of their profits. Instead, they continued to plough money into Gold, and as it pulled back, they jumped in joy and added even more. Once the correction moved from the mild to the wild phase, they panicked and started to pray. Today the sentiment is almost as bearish as it was in 2003.
From a long term perspective, a great buying opportunity could be at hand.
Most pure contrarians were caught flat-footed when the Equity markets mounted this huge rally from Oct 2004. Their contrarian indicators suggested that taking a short or neutral position was the right thing to do. Only 10% of the investors can win at any given time.
contrarian investor surges past this level (no matter what side of the fence they are on contrarian or the masses side); the markets will adjust to dich vu visa han bring this ratio back to its norm.
Investing based on psychology amounts to not only taking a position against the masses but also against the fashion contrarians. Once sentiment has reached the boiling point, one should go into cash; risk takers can consider shorting the markets. Finally, less attention is being given to the precious metals sector, so establishing a position now could be viewed as a prudent long term investment.
On the same token, most investors and experts expected the Market to Crash after Trump won and we stated that it would create a buying opportunity just as Brexit did. In fact, since 2013 we have been stating that a stock market crash was a long way in the making and that all strong pullbacks should be viewed through a bullish lens.
