Markets are up and trying to get some momentum to the upside this morning, but I’m still thinking that the path of least resistance is lower for now. I haven’t asked this question in a while, so let me ask you guys today — Who’s more scared right now, the bulls or the bears?
Let’s talk for a minute about market psychology.
I spend a lot of time going back in history and looking at the headlines and how certain stocks or markets have performed in parallel scenarios from the past. And over the last year and a half of writing and building a very helpful community at TradingWithCody.com, I’ve realized just how underdeveloped most investors’ and traders’ sense of history really is. We all know that our brain distorts events when it pulls them up as memories. And so many times, we think we know how a stock should trade today based on a faulty memory of how it traded last time.
So with that in mind, I started building what I hope is the world’s coolest, smartest and most-addictive Wall Street trading game ever – Stock Market Events That Mattered (Or Did They?), a fantasy stock market world where the player would go back in time to some of the biggest events in markets history and choose how to play each set up. The players would choose whether they want to be a short-term trader trying to turn $1 million into more than $150 million or if they want to see if they can invest $5 million with a buy-and-hold-forever approach to even greater fortunes. Just like in the real-world by using real-world events like the launching of the first iPhone (readers of The Cody Word, click here to see how well you trade the first iPhone launch set up) or when Steve Jobs first came back to Apple in 1998.
- Did Apple go straight up after the first iPhone was announced and when Jobs came back on board for the first month?
- How about over the first year?
- Did RIMM crash or spike when they announced what eventually turned out to be the disastrous Playbook tablet?
But a great trader and investor needs to go broader than any one sector of course, so we also added hundreds of setups and outcomes where the player has to choose such things as:
- Whether to trade (or invest in) GE as we invaded Iraq in March 2003
- How you should play biotech Gilead’s potential blockbuster drug, Darusentan
- Or what’s the best way to profit from Nike’s rollout of the original Air Jordan.
- and many others.
The performance of these stocks and markets in the short-term, mid-term and long-term after each of these very significant junctures will absolutely blow your mind.
And what makes the game even cooler is that just like in the real-world, you get to compete against everybody else as you try to make the Top 10 Traders of All-Time list. How well do your investing and trading skills compare to our Top 10 of All-Time? Can you too rise through the ranks from being a Junior Trader to Wall Street Legend without falling to Shoe-shiner? Start playing Stock Market Events That Mattered right now and prove that you can!
The game is designed so that anybody, regardless of trading and investing experience can play it, learn from it, and have a blast doing it.
Market psychology is a very strange beast. And the market always works to keep us humble, as you’ll find out if you try the new game. So let me know what you think about who’s more scared, the bulls or the bears. Send me your answer to firstname.lastname@example.org or post it on the site and let’s see if we can get some insights on how the market psychology is set up right now.
And be sure to come play Stock Market Events That Mattered (Or Did They?) to improve your knowledge of history, your stock trading skills — and to see where you fit amongst the Top 10 Traders of All-Time (game not affiliated with Marketwatch).
Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com. At time of publication, Cody was net long AAPL. Follow Cody on Twitter at twitter.com/codywillard.