Everyone loves a captivating story.
Stories activate our synapses, allow us to more easily process and store information, and stir our imaginations. It gives us a hook for us to sink ourselves into.
Facts alone don’t do that kind of power. We remember facts like we do any type of trivia question: interesting at first, but fleeting in it’s impact.
For facts to truly inspire, they need to be tied to a story.
Think about all of the high flying momentum stocks over the past few years. While many have exceptional numbers like earnings and revenues, the stocks that truly soared told a mesmorizing story.
Amazon was crushing it long before it ever made a profit because it sold us on a great story.
In Amazon’s case, the story ended up being true.
Not every story ends this way. Some turn into nightmares.
That’s okay, because even if the story is short lived, we can profit big while the story captures Wall Street. And maybe even get some profit on the way down.
A great story doesn’t have to be logical, but it will play with our emotions. Some will tell tall tales that spin off a truth. Whatever it takes to get the stock moving.
Once the stock starts moving, it often will take on a life of it’s own. A kernel of truth turns into a tall tale. Irrationality sets in. Fear of missing out creates paranoia. The story is so good that your mom calls you and starts talking about the stock.
When I had family asking me about real estate in 2008, and bitcoin in 2017, I knew dream stories were turning into nightmares.
That is when it’s time to wake up, put the book away, and move on to the next story.
This is post #1 of writing everyday until the end of the year. It may be a little or a lot. Some of it good and some of it bad, but I will write something every single day.
For more on swing trading check out my swing service at bullsonwallstreet.com