Play The Calls

I have been playing tennis for over 40 years and, by the mere exposure to many opponents, had my share of disagreements over line calls.

While we’ve never reached the level of outbursts of John McEnroe in the 70s, it’s been an issue from time to time, especially when playing with people whose personality makes it difficult to accept losing a point or a match.

To avoid those potential disagreements, we instigated a simple rule to just “play the calls.”

I was reminded of that during several recent discussions about investing. Some callers analyzed and projected why a certain sector should do well in the next year because of certain fundamentals, which then should warrant an investment in that area.

I hate to burst your bubble, but whatever fundamental arguments you might have, they are already discounted in the current price, which is the inherent problem with fundamental analysis.

You’re better off looking at the long-term trend, forget fundamental analysis, and only jump aboard if the trend warrants such action. In other words, to use my tennis adage from above “just play the calls” and don’t sweat the other stuff.

If you combine that with my recommended trailing sell stop discipline, you will find that your decision making process becomes much easier and less time consuming, and so will your investment life.

Who knows, you may even find the time to pick up the game of tennis.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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