It is extremely difficult to make money consistently during a bear market. However, I set out to educate myself and to learn all I could about trading and try to conquer the big bad bear. I had read a book on chart reading and technical investing writtn by the publisher of Investors Business Daily. It was full of great tips and insight that got my pumped up with confidence. After the weekend I set my plan into action certain that I would be making large gains. The first day didn't seem to work, then the second, third and fourth continue to post gains. I was applying my new found knowledge and even went back to read a few parts over to see what I was doing wrong. It was following the method to a T and went back the next week expecting to recoup the losses of the prior week. True to form the losses kept coming and I finally stopped out and started to think I guess this just isn't for me. I took a short break from educating myself and took a break from stocks. A short time later I went back and started on the charting book again to see how I could have missed the point or misunderstood the methods. I am sure you will all relate to some similar story in your own life. I looked toward the very end of the book and saw a chapter labeled as an appendix. I had never even thought about reading it because I assumed it was just another set of charts that expanded on what I had read. Most of the time I have seen these additions as minor changes or just more data that would have taken too many pages of a chapter. Well this was different. I could not believe my eyes. In large bold type on the first page it said
NONE OF THIS INFORMATION APPLIES IN A BEAR MARKET
followed by words of advice that staying in cash was the only really choice because the capital could eventually be put back to work making significant gains when the bull market returned.
I am not sure what I felt at that moment. At first relief that I hadn't misunderstood the message of the book and also like I just had gotten punched in the stomach by someone knowing that I threw a few thousand dollars out the window.
I guess the moral of the story is always read the afterword and appendix before jumping into action.
