{"id":35234,"date":"2013-01-11T11:39:53","date_gmt":"2013-01-11T16:39:53","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=35234"},"modified":"2013-01-11T11:39:53","modified_gmt":"2013-01-11T16:39:53","slug":"emotional-control-fighting-the-urge-to-short-mickey-mouse-and-the-blackberry","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/01\/11\/emotional-control-fighting-the-urge-to-short-mickey-mouse-and-the-blackberry\/","title":{"rendered":"Emotional Control: Fighting the Urge to Short Mickey Mouse and the BlackBerry"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

I had an uncontrollable urge to short the Walt Disney Company (NYSE:$<\/span>DIS<\/a>)<\/b> last night.<\/p>\n

It had nothing to do with the company\u2019s growth prospects.\u00a0 In fact, if anything\u00a0 I think most of Disney\u2019s businesses have a bright future.<\/p>\n

No, my sudden desire to short the company came when my three-year-old son, bursting with hyperactivity \u00a0after watching Mickey and the gang do the hotdog dance on the Mickey Mouse Clubhouse<\/i>,\u00a0 headbutted me in the nose while I was reclining on the couch reading a book.<\/p>\n

Little Charles Jr. got to spend the rest of the evening on the naughty mat while Daddy iced his nose.\u00a0 And luckily, the market was closed, so I wasn\u2019t able to do something impulsive like load-up Trader Workstation on my phone and take out my frustrations by shorting Disney.<\/p>\n

I tell this ridiculous story to make a very real point.\u00a0 It can be extraordinarily difficult at times to suppress our emotions as investors.\u00a0 Fear is the emotion that usually causes us to make the worst trading decisions; we often feel the urge to sell after a stock has already fallen substantially\u2014at precisely the time we should be buying.<\/p>\n

But anger<\/em> is an emotion we have to contend with as well.\u00a0 After getting burned trading Research in Motion (Nasdaq:$<\/span>RIMM<\/a>)<\/b> last year, I am the first to admit that I am no longer objective on that stock.\u00a0 Not only do I hate management, but I also hate the stock itself, as if it were an individual who had personally wronged me.<\/p>\n

Ridiculous?\u00a0 Yes.\u00a0 But these are the emotions we deal with.\u00a0 And if you feel yourself losing your objectivity, it\u2019s time to walk away from that particular trade, long or short.<\/strong> (See also “Zynga: When You Lose Control of Your Emotions It’s Time to Stop Trading.”<\/a>)<\/p>\n

Today, I see a lot of emotion among investors in RIMM.\u00a0 The stock (and its product, the BlackBerry) has die-hard fans and rabid haters\u2026and not much in between.<\/p>\n

I have no position on RIMM, at least in the short term.\u00a0 The company faces stiff competition from Apple ($<\/span>AAPL<\/a>), Google ($<\/span>GOOG<\/a>)<\/strong> and Microsoft ($<\/span>MSFT<\/a>)<\/strong>.\u00a0 It still has a strong (though weakening) position among enterprise clients and in emerging markets, but I suspect a fair bit of this is based on RIMM\u2019s lower prices.\u00a0 Given the abundance of cheap Androids flooding world markets, that\u2019s not an advantage I consider sustainble.\u00a0 Still, BB10 has gotten high marks as an operating system, and the major carriers have agreed to support it.\u00a0 The company may yet have a few tricks left up its sleeve.<\/p>\n

My advice?\u00a0 If you want to play RIMM, long or short, have trading rules in place that will mitigate your emotional responses.\u00a0 Use some sort of risk control, such as a stop loss or trailing stop.\u00a0 And it might be a good idea to have specific price objectives to help you pull the trigger and sell to lock in gains.<\/p>\n

Disclosures: Sizemore Capital is long MSFT. This article first appeared on TraderPlanet<\/a>.<\/em><\/p>\n

SUBSCRIBE <\/a><\/strong>to Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

The post Emotional Control: Fighting the Urge to Short Mickey Mouse and the BlackBerry<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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