That’s the title of a wonderful piece from Jonathan Hoenig writing for Smart Money. It’s an excellent reminder that the market is always the final arbiter.
Think of our job not as proclaiming how the markets will act, but observing how they are acting now, and attempting to position our own portfolios to hop along the trend.
So rather than command the markets to act as we think they should, investors should instead rely on the price action to observe how they’re performing and position him/herself accordingly. Because we’re not all-knowing: not you or I or Ben Bernanke, Bill Gross, Barton Biggs or anyone else. The market doesn’t know, care or consider anything we say or do.
That humility offers a more honest and realistic context by which to evaluate our next move.
In truth, the only way to make money is to follow the price trend. Relative strength is a good way to identify the strongest trends.
