Know Your Competition…

“If you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and lose one; if you do not know others and do not know yourself, you will be imperiled in every single battle.” - Sun Tzu (Chinese Military General)

“This game is too hard…”

“I can’t hope to win or compete with the likes of the “big boy” hedge funds and banks…”

This is the general sentiment toward investing in the stock market, and essentially this sentiment is correct.

Know your Competition

However…

Instead of finding areas in the market where an individual investor could be successful, he/she still invests like the rest of the crowd, which is exactly what the big Wall Street players want you to do.

“When you play in someone else’s sandbox, they are going to make the rules.” - Noah Kagan

In this section, we will point out some weaknesses of the market, so you will be better-equipped to make great investment decisions.

Investing long-term goes against the very nature of Wall Street (and human nature for that matter). Wall Street makes very little money when investors just buy and hold investments. They would cease to exist in their current capacity if all investors did this. Now with that said, I also don’t think they are going anywhere, anytime soon. So, it’s best to understand their existence and their rationale behind various decisions.

Wall Street is everywhere: CNBC, Bloomberg, newspapers, financial reports, getting a mortgage for your house. There is very little you can do to evade them on a daily basis.

Because their very existence relies on activity, it’s incredibly difficult for Wall Street to take a contrarian stance. Major Wall Street firms cannot pay their bills with customers who won’t generate fees and commissions for the firm.

I will probably get a lot of hate mail for this, BUT investors would do well to avoid interactions with Wall Street (as best you can).

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