Your Opinion Doesn’t Matter | Podcast Episode #84

0:07
Hey, I’m Ryan Mallory, and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex, ever changing world of finance. Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

0:25
You can succeed at the stock market, and I’m ready to show you how. Hey everybody, this is Ryan Mallory with the Swing Trading the Stock Market podcast, and today, on this episode, we’re talking about why your opinion doesn’t matter. Now, in many areas of life, your opinion does matter. It’s valued in the stock market, it doesn’t matter. Your opinion about the stock market, about the stocks you own, really doesn’t matter. And I know that sounds kind of crazy because we live in a time where social media has everyone putting their opinions out there. And when it comes to fintech and matters revolving around the stock market, everybody puts their opinion out there.

1:01
And they want to be right, and they want to be appreciated. But in the grand scheme of things, their opinions don’t matter squat. And I’m not just talking about everybody else’s opinions and then acting like my opinion somehow matters. My opinion doesn’t mean squat either, OK? I’m, I’m gonna be honest with you. It doesn’t matter. So, when it comes to the stock market, we hold dear to these opinions that we have, so dear, and we want to put it out there. I see it all the time with with some of the more popular people on Twitter, and I see it on TV on CNBC and uh Cheddar or uh Fox Business. People are all about putting their opinions out there. In fact, entire shows are built around putting their opinions out there and trying to act like they actually matter when it comes to the stock market.

1:46
Now, let’s go back to just about 1 week and a half ago, 2 weeks ago. How many people on social media, how many people in the media, how many people with their own talk shows, their own podcasts were calling for a 16% drop in the market. Anybody? No. None of them. Nobody was saying, hey, market’s gonna crash next week. We’re gonna have the biggest correction. And stock market history from the all-time highs. The fastest correction. It wasn’t the biggest, it was the fastest. How many people were saying it? Not a single one. Kramer wasn’t saying it.

2:17
Uh, and a lot of those other losers at CNBC we’re not saying that. I call them losers. I think, I think there’s so many blowhards at CNBC. They just don’t know what the heck they’re talking about. And, uh, Yet they have an opinion and they put it out there and they try to act like it’s gold, but it’s not. So many people are consumed with their opinions and letting them be known. When it comes to the stock market, this stock is going up, it’s going up. It’s a steel at this level, OK? Or I remember I saw a guy the other day. Market went up 1300 points, right? Obviously, the guy’s a perma bearer. He’s always been a perma bearer, but he’s like, afternoon dumps coming, market down. Stock market went straight up. Where was he to, uh, change his opinion? Did he ever change his opinion? No, he just kind of like, oh, I’ll maybe delete the tweet or I’m going to just act like I never tweeted that.

3:06
Look. The good thing here is, is that it doesn’t matter about your opinion. Your opinion does not matter in the stock market and why is that good? It’s because we don’t have to depend on our opinion ultimately being right, because all that works at the end is price.

3:23
It’s about reacting and and caring about what the market says that you should be doing. I mean, you move it to the political arena. You take the Democrat primaries right now. Last week, everybody was like, oh, Bernie’s got this locked up. It’s too late for Joe Biden. He’s never gonna win this week. Oh my gosh, Joe Biden’s the front runner. He’s win this one. I can guarantee you I’ve been doing this for 50 years and I know all about the, the political landscape. It’s, it’s, it’s definitely in Joe Biden’s hands. I mean, who knows? Maybe next week you’ll get some other person that throws his hat in the ring and all of a sudden people are gonna be talking about him. I mean, they were just talking about Bloomberg a couple of weeks ago running away with the primaries.

3:57
He’s out of the race now. He’s out of the race when the guy that they were saying that was a wash up just two weeks ago is now the front runner. So in the end, the stuff that you see on the media, especially when it pertains to the financial markets, because I don’t really care about what people say on the political spectrum. They’re, they’re a bunch of clowns anyways, for the most part on both sides of the aisle. But when it comes to the financial market. Just know that these opinions that are out there, they just don’t matter. Don’t worry about all these other opinions out there. I put something on social media saying, hey, this stock is starting to look bullish or whatever. Do you know how much I put in terms of value on that opinion, if I say, hey, Apple looks like it’s gonna go from 280 to 300, do you know?

4:38
I don’t really put a lot of faith in my opinions because I know at the end, it’s gonna be price that determines whether or not, whether or not that opinion was was correct. It’s not me that’s gonna make it correct. It’s not me saying that, hey, I bet you that if I try hard enough, I can run a, uh, a full marathon by the end of the year.

4:55
If I train hard enough, if I work out enough, I can pull that off, OK? It’s not like that. The stock market, the stock market’s gonna do its own thing. It’s, if I say Apple’s going to 300 or going back up to all-time highs, the market doesn’t care that I said that doesn’t even know that I said it.

5:12
It’s gonna do its own thing, so my opinion really doesn’t matter. So if I’m right or if I’m wrong, I had nothing to do with that. When you’re trading, don’t get married to your opinions, don’t feel like that you have to be right. Because what happens is that you start putting your money on your opinions rather than the stocks that you’re trading.

5:29
So what happens is that you say, well, I think Microsoft is going to $200. I’m going to put, you know, X amount of dollars on it and I’m gonna watch it go up. And then when it starts going down to $150 you’re like, this isn’t happened, but my opinion said that it had to go to $200. So I gotta be right. I can’t be wrong on this.

5:45
It’s gonna be uh somehow like a dark cloud over my manhood because of what I thought Microsoft was gonna do versus what it actually did. No, man, just give it up. Who cares if you’re, you’re wrong? I am wrong all the time. I tell people I’m gonna be wrong between 40 and 45% every year with my trades.

6:03
But I managed the risk. I managed my, you could say I manage my opinions. I manage the risk behind my opinions. There’s risk in your opinions that if you put too much belief that they have to be right or that they’re going to be right, ultimately, you’re gonna lose at this game.

6:19
You know, trading is a pretty hard thing to do well at. You get out there, putting your capital on the line, you’re dealing with emotions that you’ve never had to deal with. Don’t make it harder by believing that you have to be right with your opinions, that you have to be right on what you call as a stock pick. So many people are out there and they get a lot of followers. They’re like, mark my words, the stock, if it goes above $200 a share, it’s gonna go to $220. But then you actually see people even trying to hedge their opinions by saying, if it goes up to $220 then it’s gonna go up to $230 but if it drops back below $215 then it’s gonna go down to $185.

6:53
What the heck is all this? I can’t figure out what the heck this guy is saying. But they, they do that. So then people are trying to confuse you with their opinions because they’re so obsessed with being right that they can’t just go one way or the other, and they’re afraid of what it means if they’re wrong on their opinions.

7:09
Guys, when you start putting your money behind your opinions, that’s where it’s gonna mess up you. Ultimately, in the end, you have to follow price. You have to follow the stock market. What is the opinion that the stock market’s holding right now? Is that not the most important thing? Is the stock market? Going up, is it going down?

7:25
Is it showing a tendency to, to weaken over the course of days and then, and, and then not hold its gains into the close and then all of a sudden you’re seeing gap downs. Those are important clues about whether or not you should be bearish or bullish on the market as the stock market hit extremes and it’s showing a strong bounce and all of a sudden you’re seeing a lot of buyers coming in and a lot of volume.

7:44
OK, then the market’s trying to tell you something there. But what you can’t do is just say, oh, the market, market’s gotta come back. It’s gonna come back. You just gotta buy the dip. I saw a lot of people that said, Apple below 300. I just picked up shares at 299. No way it can go any lower than that. Guys, that thing went down to like 257.

8:00
If you didn’t have to be married to your opinion, you could have picked it up 250s in the 260s. You can’t be that beholden to your opinion. If you’re that beholden to your opinion, when the market’s doing something that’s contrary to what you actually thought your opinion said it should be doing, then you’re gonna lose money. Your opinions will cost you money.

8:17
My opinions aren’t worth anything when they come to the stock market. I don’t have a crystal ball, and so because I don’t have a crystal ball or I don’t have a a trader Almanac for 2021. I don’t know what the stock market’s going to do tomorrow. I don’t know what it’s going to do next week or next month, and I certainly don’t know what it’s going to do at the end of this year.

8:35
We’ve seen a heavy sell-off last week. A lot of people lost money. I didn’t. Why? Because I didn’t hold on to my opinions. I saw that the market wanted to sell off. I was like, All right, if you’re wanting to sell off, then fine, I’ll get short a little bit. So I got short. I went ahead and I thought maybe the market was gonna start to bounce. So I went ahead and covered my short position.

8:51
So it was a little bit earlier than I would have liked because the market kept selling off for another few days. But hey, look, I wasn’t, I wasn’t married to my opinions. On Monday, I bought some Citigroup, symbol with C, really nice setup, bouncing off the support. At the end of the day, I was up about 4%, really loving this trade. Everything about it I was liking.

9:09
But on Tuesday, the market wasn’t really doing what I expected it to do, and that was to give us some follow through to the upside. Instead, it started pulling back. I took about half of my position off the table for about 4%. And then it just kept on sinking. I, I took the the rest for about a 0.5% gain.

9:26
Now, why do I tell you this is because my opinion was that Citigroup should have kept going higher, but the market had something else to say about it. It took it below 65%, I would have lost the 4% I got on half of my trade, and then the 0.5% that I got on the other half of the trade, if I had stuck to my opinion, but my opinion doesn’t matter, so I have to follow price, and you have to follow price.

9:47
People who are obsessed with their opinion being right when it comes to the stock market has this like hero complex that when it comes to trading, that they have to be the hero. They have to buy when everybody else is selling. They have to keep trying to catch the falling knife and everything else. That’s this hero complex where they want this opinion to to look great and they want to have the money to show for it, but more times than not, almost every time.

10:09
People who live and die by their opinion, they’re gonna die by it, OK? They’re not gonna live by it. And when I say die, I obviously mean your capital, your capital is gonna take a beating because of it. In the end, it’s about adapting to the stock market. It’s about changing with the ebbs and flows of the stock market, adaptation.

10:27
Being a change agent, being willing to go where the market wants to take you. Why not just go where the market wants to take you? I know I’m talking in simple terms and that there’s times, even like right now where nobody’s really sure where this market wants to go, OK? But when it starts dropping you clues, you can test the waters like right now.

10:44
The market has rallied pretty well today. Nice recovery off of yesterday. It’s showing signs of finally wanting to put a bottom in. Am I sure that it wants to put a bottom? No, I’m not. So I’m not putting a lot of faith in it by adding all my capital or putting all my capital into the market right now in all these different positions.

11:02
Instead, I am just testing the waters. If the market wants to keep going higher, then I’ll keep adding more positions. I’ll keep adding more long positions. I’ll probably take some profits along the way as well. But I’m not gonna form an opinion about where I think the market has to go, because as soon as I do that, I’m going to lose and I’m gonna lose big time.

11:20
So I get a lot of questions, especially on Twitter. People will send me direct messages or they’ll at me and say, hey, what do you think about Apple? Do you think it should be shorted here? Do you think it’s, or better yet, they’ll say, do you think it’s safe to short Apple here? No, I, I’m not sure there’s ever a time to short Apple that, that I would feel safe.

11:36
Some, most of the times I don’t ever feel good about getting long on stocks, you know, there’s, there’s risk to it, you know, it’s not safe. You can be wrong. I mean, what does safe mean that you’re gonna be right by shorting it? I don’t know that. But if I get shorted and then it continues to go down, then that’s a good thing. I’ll manage the risk.

11:52
I just try to manage the risk on the trades. Don’t care about the profits because the profits usually are tied to my opinions. I just try to manage the risk. If I manage the risk, the profits will take care of themselves. So I know this was probably an interesting topic to talk about today that, OK, why, why did he talk about this? It’s just because there’s been so many opinions out there floating around, so many opinions that go unchecked.

12:11
They’ll put something out there, people will believe them. They will, they say, well, if he’s saying that I, he’s got to be good at what he does. I’m gonna get, people are asking me right now, hey, is this the time to get long? I don’t know. I have no idea. I don’t know if the market’s bottom is in it. This market could be 15% lower next week.

12:28
I just don’t know. But I’m not gonna be like some buffoon that you see on social media or on TV or on radio and be like, hey, this is what the market’s gonna do, book it. No. Because the market’s gonna do what it wants. It, it is not beholden to my opinions, nor does it care about my opinions.

12:46
And until you realize that in your own trading, you’re not gonna make make much in the market from a trading standpoint. So, Give up your opinion on the market, adapt, follow the change, follow the direction that the market wants to give you, you’ll be fine.

13:02
Thanks for listening to my podcast Swing Trading the stock market. I’d like to encourage you to join me in the SharePlanner trading block where I navigate the stock market each day with traders from around the world. With your membership, you will get a 7-day trial and access to my trading room, including alerts via text, email, and WhatsApp.

13:20
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13:40
All the best to you and I look forward to trading with you soon.