I have made more money doing nothing than I have ever made doing something.
That sounds like a bumper sticker until you sit down and count it. Go back through your own account and add up what your best positions would have returned if you had left them alone. Then compare that to what you took out of them.
Most people find the same thing I did. The selling is where the money went.
You will make more in a ten day window than you will in the other 242 trading days of the year combined, and I am not exaggerating for effect.
The biggest gains happen on massive breakouts, and those breakouts arrive after everybody has gone to sleep and quit.
Think about what that means for how you spend your time.
If ten days carry the year, then 242 days are spent waiting. And waiting badly is what destroys accounts, because a bored trader starts flipping in and out looking for something to do.
Why quitting is the tell
The breakout usually arrives the moment everyone gives up.
I have watched it happen too many times to call it a coincidence. A stock sits there for months, does nothing, drifts sideways, and every week somebody writes to tell me it is dead money. Then the sellers finally exhaust themselves, the last holder throws in the towel, and it runs.
The people who quit at month five never see month six.
So when I tell you a position needs time, I am not being patient because patience is a virtue. I am being patient because the math of this business only works if you are still holding when the ten days show up.
What patience is not
This is where people get it wrong in the other direction, so let me be precise.
Doing nothing is not the same as ignoring a position. I check the weekly chart on everything I own, every week, and I am looking at three things.
Whether the channel is still holding, whether the weekly MACD is deteriorating, and whether money is still coming in or has started walking out.
As long as those hold I sit on my hands, and when one of them breaks I have new information and I act on it.
The money flow never lies. People do. So I let the flow tell me whether the thesis is still intact, and if it is, I close the laptop and go do something else.
Be calm. More money is made sitting still with your eyes closed than in all the flipping and chasing people do to feel busy.
The trade I still think about
Back to the stock I shorted.
I was right about the direction and right about the level, so I covered, booked nine dollars a share, and felt clever about it.
Then it kept going, and the position I closed would have been worth multiples of what I took.
I never lost a dime on that trade, which is exactly why it bothers me. Being right and getting paid for being right turned out to be two completely different outcomes.
Doing nothing would have paid me better than anything I did.
Professor Jeffrey Bierman
Creator of the Genesis COG System
