If you're a math person, a function always provides the same answer.
If you're a student and you do well on a test, you expect a great grade.
In the equity markets, forget about the clear answers and immediate feedback. It's never clear or immediate.
Good decisions can result in bad outcomes and bad decisions can result in good outcomes. Another way to look at it is just because something may have been calculated as a very good decision, it doesn't mean the outcome will be good. It works the other way too!
The market is not a function like math. The same actions can have a different results during different trials or time periods.
Feedback can also take a very long time. A good purchase can go down for a while before the "herd" finally recognizes it and pushes it up. But...it isn't cause and effect. Riding the wave of a fast growing stock might feel like a good decision. That is until the wave rolls over. Waves usually have a way of doing that!
If a market participant can't accept these "natural laws" of the equity markets, they should stay away from equities as it will be nothing but pure heartache!
Be smart, be well-read, be aware and be successful
