There are a lot of opinions in the market.
Turn on financial television for five minutes, scroll social media for a few minutes, or sit through an investment committee meeting, and you’ll hear no shortage of predictions about what’s supposed to happen next.
But markets don’t care what any of us think.
Last week I joined my old friends Ryan Detrick and Sonu Varghese on the Facts vs. Feelings podcast.
They told me it ended up becoming the most-watched episode they’ve ever done. That’s pretty cool considering they’re closing in on 200 episodes.
I thought you guys might enjoy it, too.
One thing we kept coming back to was the title itself, “Facts vs. Feelings.”
That pretty much sums up the way I’ve looked at markets for most of my career.
The Only Fact That Matters
People ask me all the time why I spend so much time looking at charts.
The answer is simple.
Price is the only thing we know for certain.
Every trade represents buyers and sellers from all over the world putting real money on the line.
Every opinion, every earnings report, every economic release, every news headline, every rumor, every piece of public information, and every bit of private analysis gets filtered through one thing: price.
Once a trade happens, that’s a fact.
Unlike earnings, economic data, or analyst forecasts, prices are never revised six months later.
They’re simply the result of millions of participants collectively deciding what an asset is worth at that exact moment.
That’s why we start with price.
Not because it’s the only thing that matters, but because it’s the only thing we know is true.
Feelings Move People
Humans are emotional creatures.
We always have been.
Those instincts helped us survive for thousands of years. But they don’t always help us make investment decisions.
When money is involved, our stress levels rise. Fear gets louder. Greed gets stronger.
Confidence turns into overconfidence. Panic turns into bad decisions.
The stock market shines a spotlight on those behaviors every single day.
That’s why we spend so much time studying sentiment, positioning, breadth, momentum, leadership, and relative strength.
We’re not just trying to understand what prices are doing. We’re trying to understand how people are behaving.
Markets are one of the greatest laboratories for human psychology ever created.
The facts show up in the prices.
The feelings show up in the people.
Understanding both is where the edge comes from.
Go Meet People
I’m writing this from Vancouver, British Columbia, where I’ve been spending a couple of days at the Monument Traders Alliance War Room Boot Camp.
One of my favorite parts of these events isn’t standing on stage.
It’s meeting so many of you who read Everybody’s Wrong every day.
Thank you. You guys have been an absolute riot.
It’s easy to spend all day behind a screen. We all do it. But we’re social creatures. We’re meant to get out into the world, shake hands, have conversations, and build relationships.
Ironically, we talked about exactly that on the podcast.
Ryan told the story of how, back around 2011 or 2012, some random guy slid into his DMs and invited him to lunch while he was visiting New York from Cincinnati.
That random guy was me.
We grabbed lunch, talked markets for a few hours, and we’ve been friends ever since.
Twitter is how a lot of us met back then.
And it’s still one of the best ways to build relationships today.
So if you get the chance, put the phone down for a little while. Go meet someone. Grab coffee. Have lunch. Talk markets. Talk baseball. Talk life.
You never know where one conversation might lead.
And if you have a little time this week, I hope you’ll give our Facts vs. Feelings conversation a listen.
I think you’ll enjoy it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs