The Secret to Beating 99% of Investors

The market is designed to fool most of the people most of the time.

Legendary trader Jesse Livermore said that a long time ago. And it’s still true. The market’s fooling most of the people right now. Are you one of them?

Today we’re going to find out.

And here’s my promise: if you can train yourself to shut out all of the squawking you’re hearing about crashes today and just play the big market trends, you’ll end up a hell of a lot richer than 99% of the other investors out there…

Look, I’ll be the first to admit this year’s stock market has been one big pain in the ass. Every time it looks safe to buy, prices drop. And every time investors get spooked stocks sprint higher.

That’s frustrated traders—which is probably why no one’s feeling excited about the S&P 500 sneaking to new closing highs Friday.

“These record levels on the S&P look familiar?” asks Shawn Langlois over at MarketWatch. “They should. They’re pretty much the same ones we feted a couple months back. Since then, the market has become a rangebound bore, trapped in an excruciating cycle of dip-buy-dip that is draining investors of their optimism…

“At this point, the S&P is at the top end of its recent channel, fear is still wafting about, and it looks as if the bear camp is getting increasingly crowded. This week’s survey from the American Association of Individual Investors shows bullish sentiment dropped to 26.7%, its lowest level in more than two years and its 10th decline over the past 12 weeks.”

Bizarre. We’ve got new highs in the S&P (while the other major averages aren’t too far off the mark) and everyone’s down on stocks.

Sure, I get it. There are plenty of reasons to sell stocks right now. But if you look at the past six years you can’t name a single moment when a reasonable person couldn’t rattle off a list of reasons to sell out. And plenty of bears did rattle off a list. Truth is, there’s always a “good” reason to sell. Doesn’t make it right though. For the past six years all of those reasons have been wrong. Dead wrong.

And I know it’s not easy to switch into “buy mode” here—especially after the market has toyed with you over the past five months or so. It’s tough to turn off the negative vibes after selling a string of failed breakouts for small losses. I know the feeling…

But think back to Livermore’s quote. The market is designed to fool most people most of the time. And most investors are bearish right now. What does that tell you?

The charts are showing a strong breakout in stocks this week. And the real fools could be the ones ignoring the power of that breakout move, especially when most folks are bearish. This could be another opportunity to buy, not sell. But their emotions won’t let them buy.

Investors never change. They trade off their emotions then use their intellects to rationalize their decisions. And if there’s one thing I’m trying to get you to do it’s to ignore your emotions. Ignore them and you’ll make far more money in the markets than most.

But anyone can say they ignore their emotions. Few can actually do it. Can you? We’ll find out…


Greg Guenthner
for The Daily Reckoning

P.S. Don’t fall for the market’s tricks. If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE.

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