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So there’s this trend on FinTwit that I find fascinating and want to spend a few minutes talking about. I’m not sure exactly how it started, but recently it seems like there’s a lot of traders (big & small, retail & institutional) that really like fading the crowd and taking contrarian positions. I’ve even watched some traders that I respect repeatedly post Twitter polls to gauge sentiment with the explicit intent of fading whatever the predominant sentiment is. Some even boast about their contrarian positions, attempting to make others feel like inferior traders because they are trading with the current trend or not attempting to call the top/bottom of a market. This is very amusing to me. What can we learn from this behavior? I’m admittedly speculating, but I think we can learn a couple things:
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Very much appreciate your work. Keep it up! Learning tons
If I were a gold miner and all the gold was a couple inches underground, I’d look pretty smart. Until the gold ran out.
In this strange new 2022 market, good trades/investments are buried deeper and many have dug themselves into empty holes they fear they’ll never get out of.
Time to learn the art of mining.
I feel like anyone who’s doing this (and just started recently) is probably lost right now, and searching. They probably need a reset, but this ain’t it. Hopefully they figure it out for their own sake.
Love the psychology concept of people feeling the need to be right or double down on a public view b/c they can't admit they are wrong (just look at recent south park episodes).
I think a problem is a lot of people misalign trade timelines and try to be hero. Ie market goes up 70% of the time, yet to call the exact top (ie puking at the bottom) instead of adjusting the portfolio to survive higher vol or keep dry powder for market pukes etc
I'm still fading the shit out of Sam.