Being human when investing

Past few days were dramatic. 

Markets falling all over.

$Apple(AAPL)$ $Coinbase Global, Inc.(COIN)$ $Tesla Motors(TSLA)$ $Alibaba(BABA)$ $TENCENT(00700)$ 

It's especially bad for those who are vested with China related stocks.

I had added to baba ytd via options.

Slight drop for new position, but I am perfectly fine with it. 

There's a sinking feeling in the gut area whenever there's Wide spread drop in the markets. When almost all the stocks are down at the same time, and those that are having some positive movements are like a drop in the ocean of red. 

Usually on days like these, somehow I will tend to be moody. Cos stock market long term is up, like it or not, majority of positions will be bullish even though there are some short call positions to cushion the fall. 

Those who are not using options as protection or distance themselves from the market will feel even more miserable.

However, experience tells me that these periods when I am feeling miserable is usually the better times to add to bullish positions. 

Reason being that there is even more value in whatever we buy. Overpriced stocks will become more reasonable, fairly price stock will become undervalued and undervalued stocks will be having clearance sales. 

On such days, the commentary is extremely negative. Tiger users who respond to posts sounds defeated, angry and even fearful. 

The same situation happens in YouTube, whereby many content creators paint a doom and gloom picture. 

Under such a backdrop, it's human to just throw in the towel and close the positions. 

It will reduce the negative feelings that we are having at that moment of time. 

Those who are positive and shouting buy! It's an opportunity! are mostly in short supply. 

The issue is that, there's no confirmed way of predicting when is the market bottom. 

Even those who are bullish, won't dare to call a bottom, they can at most guess the bottom. The only way of predicting the bottom requires the use of Time Machine and maybe Elon musk. Which at this moment of time, Elon musk is too busy making money to think of Time Machine.

However, the irony is that most of the gains in stock market are made during bearish times. When we are feeling the worst, is the time that stock market is giving the most discount. The worse we feel, the better the discount. Stock market is the only place whereby there are sales and people run away. Which is strangely not so human after all. Maybe that's y females make better investors. hang a notice: BIG SALES! And females will be there.

What do we do when we are feeling moody when bears gather and party?

Personally, the key is to have conviction in our holdings. If there's no convictions, the fear and emotions will be insane, as there's no anchor nor belief in the holdings. 

Evaluate what has happened, if it's only 1 stock that's falling, then something is wrong. If the whole market is falling due to an event, there's likely wide spread fear and the baby is likely thrown out together with the bath water. There's always a tendency for markets to overreact to events. People will tend to fire first and ask questions later. it is likely good stocks are suddenly having discount due to fear in the markets.  

After that, it's a great time to review portfolio, is there any float that I can use to add positions. Or is there any other war chest that can be used.

The issue is that we do not know where's the bottom, hence it's better to just set price targets that can continue to average down instead of 1 lump sum. 

Which I did with baba As above. 

i have accepted that during times like this, emotions will be haywire. Hence, after the positions are entered. Take a break and go do other things. Since there's conviction in the long term play in the stocks, just let them do what they are supposed to do. 

Strangely, just 1 week ago, I was looking athe markets and can't find anything to buy as I can't find any discounts that entice me. 1 week later, when the discounts come to me, I became moody. 

Guess that's how human emotions messes with us when we are in the markets. Hence, there's always fear and greed in the markets . We will tend to chase the bulls cos of FOMO and tend to run away from the bears due to fear. 

Control and mastery over our own feelings and emotions will make us better investors. 

Shall end off with quote From my fav investor