It happens to all of us. We see a negative story about something, read a positive article, hear a friend talk, muse about a situation. And when we do we sometimes get an overwhelming sense. It might be good it might be bad. The question is, do we act upon that feeling or not?
I’m not going to answer the question for you. Well, maybe I’ll hint at what I think the answer is. But as a favor I’d like you to do some homework. Please, really, take a few minutes right now.
Think about things you have strong feelings about. Your stock portfolio, your favorite football team, national politics, hurricanes, whatever.
Now I want you to write down what you’re afraid of/hoping for in 2011. Do you think the stock market is going to crash? Do you think that this if finally the year the Chicago Cubs win the World Series? Is the ‘big one’ earthquake is going to destroy California? Write down your predictions. Try to pick maybe 10 things. You’re not trying to win a contest about accurate predictions (the Lakers will have a winning record, there will be a big earthquake somewhere in the world). Instead put down your biggest fears, greatest hopes. Put that list somewhere handy. Now the real homework. I want you to take that list out once a quarter and look at it and see how accurate you are. No fair updating your predictions!
It will be interesting to see how many times you guessed right. I’m betting it won’t be many. And that’s something you really need to keep in mind the next time you make a big decision based upon having a ‘feeling’. We have a tendency to forget the 50 times we had a feeling and were wrong, but remember the one time we were right. ‘Trust your feelings, Luke’ isn’t usually good advice. Our feelings are just that. But don’t take my word for it, I’d really like you to see for yourself. Then the next time you decide that penny stock is going to zoom to the sky, or that hyperinflation going to start any day because you have a ‘feeling’, keep this list in mind.
Oh, and if you get all 10 right? In that case, I was wondering if you had some stock picks for me.