This week, hosts Tim Bohen and Kim Ann Curtin welcome special guest Peter Atwater.
He’s the president of Financial Insights and an adjunct professor at William & Mary and the University of Delaware. Peter Atwater’s also the author of the book “Moods and Markets: A New Way to Invest in Good Times and in Bad.”
But he’s most passionate about socionomy. The word has Kim tongue-tied. Socionomy focuses on the interplay between social moods, cultural and political movements, and the markets.
So to break it down … Can you find the opportunity in a crowded room? Do you leave before the party’s over?
How we behave in real life is often the same as how we trade online.
The key is timing. It helps when you can read the room. Peter Atwater will teach you how in this week’s episode.
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Peter Atwater’s Market Moods
Peter Atwater says to keep an eye on flash mobs with money. Not on the street (although, that would be cool to see), but in the markets.
Crowds show up in droves — and fast. We saw that with Nikola Corporation (NASDAQ: NKLA). But they can disappear just as quickly.
Atwater’s amazed by the momentum on Twitter. He says, “We think it, we say it, and then we act on it … They’re a fast-moving crowd and if you’re late, you’ll catch the tail end of it thinking it’s only the beginning.”
Sounds like chasing breakouts that turn into fakeouts. So how do you improve your timing?
Bohen shares the scientific reason for our human need to understand where others are coming from. Tune in to find out why we need to understand crowds to feel safe.
And Peter Atwater lays out what to look for at the beginning and the end of a parabolic move. Don’t miss his unique insight!
Emotion vs. Mood
For Peter Atwater, emotions and moods are two different things. Kim’s curious about the distinction…
Atwater says moods are external factors and emotions are our responses to them. But it goes deeper than that. He says, “Confidence isn’t about you, it’s about how you see yourself in the world.”
And how we see ourselves affects how we trade. When we’re in a low mode, our confidence wanes. We feel competitive but forget our best strategies.
Find out the simple slogan he uses to catch himself when he’s in this unhelpful mindset.
Of course, overconfidence isn’t good either. It can make us more friendly and generous with others … or lead us down the wrong path.
Find out Peter Atwater’s top tips for identifying high-flying moods — and how to stay in control and make smarter decisions.
Peter Atwater on Certainty and Control
Atwater says certainty and control are two things all humans need. Without them, we freak out … like ‘buy the top, sell the bottom’ freak out.
When a stock rises, our sense of safety kicks in. We feel like it will stay that way forever. Then when the mood changes, we panic.
But life and stocks never guarantee certainty or control. So what’s a trader to do?
Peter says, “Buy Adele and sell Pharrell.” When stocks are “rolling in the deep” (crashing), you buy. And when they’re “happy” (rising), you sell.
We know this. But is there a way we can train ourselves to follow it?
Atwater and Bohen think so. Atwater shares examples of what emergency room doctors do when there’s no certainty or control.
Bohen agrees with the concepts. He says he learned all about them from former Navy SEAL Jocko Willink. Find out which strategies could help you feel certain and in control of your trading game.
What Do You Think?
What’s your take on Peter Atwater and market moods? How well can you read the room when it comes to the markets? What helps you feel certain and in control of your trades?
We’d love to hear what you think, so drop a comment.
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Kim Ann Curtin