Some Things Never Change

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"Right now the markets are weighing the good, bad, and not-as-bad-as-we-thought."

An old friend of mine stopped by the office a few weeks ago and he unwittingly reinforced my complete confidence that you can still do very well in the markets. This is saying quite a bit given the frustrating state of the markets where government decree drives nearly all of daily trading activity.

Now, he wasn't overly bullish or bearish. He wasn't betting big on a rally with banks. And he didn't just make a huge score on some triple-leverage ETF or anything like that. He's simply running his business and, in the midst of the worst economic downturn in decades, it's doing exceptionally well.

You see, my friend is a coin dealer. He sells gold and silver coins and bullion. But just the fact more people want more gold and silver bullion "insurance policies" during this time of uncertainty isn't what has reinforced my faith in the markets. It is how his sales were moving on a day-by-day basis that had relieved any angst I may have been feeling.

He told me, "Ya know, when gold is at $800 or $900 an ounce, orders come in at a pretty slow rate. The volume is good, but it's not overwhelming. When gold passed $1,000 an ounce, orders just flooded in."

It doesn't make any sense at all, right? Wouldn't you want to buy gold at $800 rather than $1,000 an ounce?

Well, as we've seen though, the herd doesn't care. In this case, they couldn't get enough gold at $1,000 an ounce and they have much less interest when it's at $800.

Some things just never change. And the sooner we realize the most recent government intervention-inspired rally is what it is, we can get prepared for what is coming up next.

Right now the markets are weighing the good, bad, and not-as-bad-as-we-thought. The not-as-bad-as-we-thought is winning.

We still haven't seen the "panic buying" from folks who are afraid they'll never get to buy this low again, which normally signals the end of the rally.

As an investor, I'm still sticking to a defined plan, buying stocks strategically, and trying not to get caught up in the day-to-day ups and downs.

Those are the real keys to investing successfully in a market like this.

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