Fleck's Thoughts

A reader was kind enough to send in a collection of his favorite "thoughts" from Bill, which are reproduced here.

Human nature never changes. QE has inspired the notion that government debts are painless, while we kick the can and make all long-tail liability problems worse. This will be an immense train wreck when people sober up.

Flow of funds data can easily be misleading, which is why I don't pay much attention to it.

Great technicians in my experience have a unique feel that goes beyond the charts and supposed "rules."

I never, ever, ever sell premium, no matter what.

The banking system (in 2008) was leveraged north of 40 to 1 on garbage. Now, we just have massive debts everywhere, but the banks are in better shape. It's a different setup.

Overbought is a function of how fast something moves in a certain time period. You can be overbought on a daily chart and not be on a weekly or monthly one. And there are lots of other permutations, such as a five-minute chart, an hourly chart, etc. I don't pay much attention to that data. In general, staying overbought or oversold is what happens in bull and bear markets, respectively.

Green New Deal, cancel student debt, free health care for all, including those people here illegally, etc. When money is free anything seems feasible/affordable regardless of how costly the policy may be.

Sitting tight is very hard. In the last six years everyone has learned that rallies don't last. People fight the last battle repeatedly.

Sitting tight doesn't mean never selling anything, because positions do need to be cut back or sold sometimes (i.e., risk management still needs to occur). It does not mean trying to be cute about guessing what the market will do and selling just to try to dance around price moves.

[Gold]…is often just protection against bad stuff happening, but sometimes so much is wrong that it can go up a whole lot, so it becomes a means to creating wealth as opposed to just protecting wealth.

What appears to be happening is that the stock price is what it is, then depending on whether the report was deemed to be successful, the price moves. This occurs regardless of how extreme the valuation is and whether the current growth rates and margins pencil out to the sort of valuations that exist. In essence, fundamentals have no real bearing on price, as only the storyline appears to matter.

You must decide. If you do what I do, you will get hurt. You must have a reason for what you do based on what you expect.

What's harder than making money? Keeping it.

Speculating and investing are completely different and you need different rules. Sitting tight is fine for pure investing, but for speculating you need to sit AND trade.

The most important point is that you can't just relax with your investments. When the positions are big you have to worry more and plan what you may do if events play out in an unfavorable way. That doesn't mean you must constantly worry, but you need to understand when the position(s) require more vigilance.

I have no price target because that is a foolish idea when it comes to gold, IMO.

Getting too cute is making a trading decision because you are guessing (versus having a lot of conviction) that a decline may be coming without having any really great reason.

FWIW, I don't really care about behavioral psychologists' theories.

I've been chopped up a lot at both peaks and valleys, so I've learned that being flexible is just part of the process.

In investing it usually isn't what you could have known before you started a position that hurts you, it's what you learned along the way that you didn't properly analyze (or RATIONALIZED) that costs you a lot of money.

Don't try to force things. You can wait for a setup you really like.

Financial irresponsibility, as we saw in the late 1990s and the early parts of the prior decade, can produce bubbles that make the economy look better than it is. So financial markets are not the place to look for an understanding of the economy.

Nothing means anything as we wander through the twilight zone.

When something negative happens that you don't expect and is material, it is often wise to reduce the position and then reexamine the whole idea all over again (like I just did with KL for instance). Just clear your head and start over.

I personally don't like buying just because "it's cheap." I'd rather have some reason why I think that may change before I act.