The Saturday Cut: Bad Markets Expose Bad Actors
Markets move on. These ideas don’t.
Three themes worth adding to your process.
Timeframes Influence Position Size
One of the easiest ways to get into trouble in the market is to confuse an investment with a trade.
Someone buys a company because they believe it will be worth substantially more five years from now, then allocates capital as though they expect to be proven right by next Tuesday. When the stock inevitably becomes volatile, they panic—not because the long-term thesis has changed, but because the position was never built to withstand the journey.
Timeframe and position size have to work together.
The farther into the future your thesis extends, the more room you need to give it. That doesn’t mean blindly averaging down or ignoring technical deterioration. It means building the position gradually, keeping enough cash in reserve to remain flexible, and accepting that the path is unlikely to be smooth.
A long-term investment shouldn’t feel like a leveraged day trade.
If it does, the problem usually isn’t the company.
It’s the way the position was constructed.
Let the News Give You Ideas, Not Decisions
I’ve never believed that investors should ignore the news.
The market is full of interesting stories. A new product is announced. A regulation changes. An industry begins attracting attention. Those developments can point you toward companies or sectors you may never have considered otherwise.
The trouble begins when the story and the chart stop telling the same story.
That’s where I’ve made some of my most expensive mistakes.
A compelling narrative has an incredible ability to convince you that the market is wrong and that your patience will eventually be rewarded. Sometimes it is. More often, the technical deterioration is trying to tell you something before the headlines catch up.
News is an outstanding source of curiosity.
It’s a poor substitute for risk management.
Use it to build a watch list. Use it to discover new ideas. Use it to understand why people are paying attention.
Just don’t let it talk you into ignoring what price has already decided.
The best opportunities occur when the story and the technicals are pointing in the same direction.
That’s when you have both a reason to care and a disciplined way to manage the trade.
When the Marketing Stops Working
Bull markets have a way of making almost everyone look like they know what they’re doing.
Momentum does most of the work. Stocks keep rising, confidence grows, and social media fills with people who seem to have an uncanny ability to pick the next big winner. Before long, they’re selling newsletters, trading rooms, Discord servers, subscriptions, and courses built around the idea that they’ve figured the market out.
Then the market changes.
The same stocks they were pounding the table on a month ago are suddenly down 40%, 50%, even 70%. The certainty disappears. The explanations multiply. Yesterday's "can't miss" trade quietly becomes today's lesson in patience, market manipulation—those damn shorts—or why everyone should have expected the volatility all along.
That’s why I pay close attention during difficult markets.
Not because I enjoy watching people lose money. I don’t.
Because corrections perform a service that bull markets never can. They expose the difference between people who have a repeatable process and people who have a repeatable sales pitch.
When the market gets difficult, it exposes who is making money in the market, and who is making money talking about the market?
If someone spent the last month telling people to pile into the exact stocks that just collapsed, that’s worth remembering. Not because good traders are never wrong. Every trader is wrong.
It’s because a good process survives being wrong.
A business built on selling excitement usually doesn’t.
The next time the market gets ugly, don’t just review your portfolio.
Review the people you’ve chosen to learn from.
This is the thinking.
The Full Daily Update is where ideas become action—best setups, best odds, least risk.
All opinions expressed in The Lund Loop are my own personal opinions and don’t reflect the views of my employer, any associated entities, or other organizations I’m associated with.
Nothing written, expressed, or implied here should be looked at as investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own diligence.