Learn to be objective

When it comes to being objective about a fundamental idea remember to not think with your position. Two people can hear the same news and look at it completely differently because of their positions. A typical example occurs when an economic number comes out that is good for the economy. Those who are long-biased will think, “Wow, the economy is doing great; this market will keep going up.” Those who are short will look at it and think, “Great, the economy is getting too strong; the Fed will not cut interest rates again, so the market should sell off.” The market can go either way in these situations. The market will tell you where it should go, and your opinion doesn’t mean anything to the market. By focusing on the market and not on the fundamentals, one can be more objective and have a better grasp of what is going on.

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