Winner's Curse and Cycle

The cycle of "life" is about the start (germination).. growth ... mature ... decay ... end. 

If one wants to remain in the cycle, one has to understand and respect the cycle and the stage. When I was first actively in the market back in 1993, I was in the growth state and prospering like I was good and invincible. Suddenly, the market experience a sudden death when the former Minister of Finance Malaysia (Daim) warn people to exit and the stampede.

If I had taken the effort and trouble to learn about markets before diving into the market after returning to Malaysia like the Bull and Bears trends. The strategy to protect capital when there are NO derivatives products to insured what sort of orders or action steps MUST decisively taken.

MY "LEARNING" started after the stampede. I paid a very heavy price for this LESSON. 

This doesn't mean that what is NOT taught in school when I was doing my MBA is NOT important. The finance subjects are theoretical analytical and not about how to be a commando in a combat.

It was the market that turn me into a commando in a combat and not the university. 

Stepping into the market and immediately churning profits without understanding the market natural behavior is exactly a winner's curse at the growth-mature stage. Winners will never be prepared with Plan B especially for first timer. The head is filled and full of confidence. When the market turns and without Plan B, this turns to panic and fear. 

How about one started the entry at Germination/start phase? Irrespective of any phase, if this does NOT include Plan B than one is bound to face the risk of financial loss.

There is NO exemption to learning about trend, cycle and strategies if one is serious about navigating safely and profitably.

One of the other issues is HOPE. When the market goes again one's position and a temporary situation only to climb higher, this HOPE is very detrimental as it gives a false confidence especially when one does not understand and have no idea about trend cycle behavior.

We cannot deny the existence and importance of Trend Cycle, the behavioral patterns within a trend (UP or DOWN) is similar over time except they are opposite direction. The differences will be duration of a cycle and intensity across different cycles. The side way trend  is completely different from UP/DOWN trend and every side way trend similar across except the duration and the price ranges.

Up and Down trend are opposite in nature BUT side way range trend is completely different from UP or DOWN trend as it goes horizontal.

Understanding the trend, cycle and behavioral patterns means one need to have a simple EXIT plan (PLAN B). This knowledge prepare us to the unfolding behaviors and what to expect.

Make mistakes, learn and improve than you will be upgraded.