The Stomach vs. The Brain
In the stock market, most people think a high IQ is a golden ticket. It is not. If it were, every college professor would be a billionaire. Instead, they are usually just people who know a lot about things that don’t matter.
Peter Lynch, a man who saw more panics than a fire chief, realized that the stomach is far more important than the brain.
The Internal Civil War
The brain is a clever liar. When the market drops 10%, your brain tells you that the world is ending and you should sell everything and buy canned beans. It uses logic to justify fear. But if you have already planned When to Sell based on the business, your stomach can keep your hands away from the keyboard.
The stomach, however, is where the courage lives. If you have the stomach to watch your portfolio turn red and stay there for a month without vomiting, you have a chance. You must also avoid the temptation of the Diworseification Trap, which is just a way of trying to hide from your own fear in a crowd of mediocre stocks.
The Smartin Discipline: DJT
Look at a stock that moves on nothing but emotion. It is a roller coaster designed by a madman.
- Smartin Roast: If we ran the Smartin App on a “Vibe” stock, it would tell you that the PEG ratio is non-existent because the earnings are imaginary. Your brain might want to gamble, but your stomach should tell you to stay away.
If you don’t have the stomach for the drop, don’t get on the ride.
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