Transcription:
Hey, Dan Murphy here. I cannot believe the crap that people spend money on. The dude carves his name into the landscape, I believe this is in the Middle East, and spells out his name but that’s what happens when you've got too much money on your hands. Or my favorite here: a gold plated Rolls Royce Phantom. I don’t even know; the car is already so expensive anyway but why are you putting all this extra weight gold and stuff on there, and again it’s that people will spend money on anything.
I just wanted to share a good laugh with you and I also wanted to say that, it doesn’t matter how much money you make there's always somebody else making a whole bunch more money so be happy. That's all I can say, starting the New Year, 2012 and everybody is talking about Armageddon. So let’s have some fun today. Let’s talk about the markets real quick though, can’t get away from talking about the markets. That's what I'm all about.
Speaking of gold and there’s crazy spending going on in some parts of the world, gold has been in a bear market and what's funny about this is that now that everyone is coming to the conclusion that gold is in a bear market and you also have silver down nearly 50% from the highs made here. Seems to me that maybe we should be looking for some sort of bottom and we had some losing trades in here but then we ended up buying at the low of the day.
Check this out, the worst thing in the world is to focus on buying the low. We just lucked out. This doesn’t happen too often when we get the low day and everything like that. You know my saying, and if you haven’t heard it before here's what it is: Most people will fight for buying the exact bottoms and tops, well that’s like fighting for the table scraps. If I'm using a fish as my analogy here, that’s like fighting for the head and the tail of the fish when really what you should be doing is focusing on the meat which will be right in the middle.
Most people are really putting too much effort in buying the bottoms and trying to sell the tops instead of looking for the meat in the moves in there, whether they’re up or down. So I just want to give that as a reminder but it is cool in a way to buy bottoms. There's a question that I heard once that really slapped me in the face and woke me up and it was this: Do you want to be right or do you want to make money? See there’s a huge difference here.
The people that want to be right, they’re looking for large win percentages. They want to be right 90 per cent of the time. They want to buy these bottoms and sell the tops and what are they trying to do; they’re trying to stroke their ego. This is seen every day in the markets. Now let’s look at the next part of the equation, do you want to make money? Why in the world are we doing this? Why do we sacrifice our time to trade? What are we doing? Well it should be all about making money.
It should be about how much money you make versus how much money you lose. So how much do you risk at any one time. We call those a draw down. But, for most people, especially day traders, it’s all about being right. It's about stroking the ego and it is not about making money. Now I've said that, I hope it's something you can think about and internalise and think about which crowd you are trying to go for, and believe me this is a very serious matter and one that you have to come to grips with right away and hopefully it will sink in as you can start to understand where you’ve been going wrong, and odds are, since 95% of traders lose, you have been losing and there’s somewhere along the line where you went wrong.
This is a classic thing that I've seen a lot. It’s all about the ego; it’s about bragging rights and so forth. Like I said I’ve seen this a lot in day traders. I'm a day trader, I love catching bottoms and tops but really when I come down to it, I've got to remember and remind myself that it's not about bragging rights or ego and all of that bullshit, it's about making money. It’s not about making money so you can buy stupid crap like putting your name in the dirt so people can see it from outer space.
I would rather that you give with what you earn and, hopefully, whatever I teach I would really appreciate if you could donate to charity. My particular charity of choice: the Make a Wish Foundation is pretty awesome. So that’s the one that I usually try to point people towards as a compass of sorts. Whatever charity you have besides yourself, besides “the charity of me”, I would appreciate it if you would do some giving.
I know the holiday season is pretty much over but let’s not forget to continue this year round. But, let’s just go ahead and let’s get back into gold and silver. Like I said I want to be a contrarian that everyone already knows it’s a bear market and gold and silver so why don’t we look for points to buy at pull backs now. We’ve been shorting the SMP 500, it’s not been the best strategy so far but these things all work themselves over time.
That's why the trading models are awesome. They’re nearly at all times high, great to see. Now let’s go ahead and look for the opposite in gold which would be to buy the dips and eventually sell into rallies. We have leading indicators in gold and that’s not something that I don’t talk about too much in these videos. I do have to keep some recipes to myself and just as a reminder, I didn’t send this email to everybody but I just want to give you the invite, it’s totally last minute and I am closing the doors on this, but I do have a mentorship program and I am accepting applications for that right now and I’ll just redirect you after this video.
What I want to say about 2012 is while everyone is talking about Armageddon, I'm not going to talk about any of that stuff. I'm not going to have any predictions, any of that baloney because the markets change from day to day, from hour to hour because the markets are always changing because the future is not knowable.
We can quantify a lot of things about how the markets will react to whatever sort of information event could happen but the future is not knowable and therefore we have to adjust our strategies accordingly. I'm not looking for Armageddon for 2012, I’ll try to keep up beat and let’s just get down to business though, let me just redirect you now. Thanks.