Happy New Year – and Happy New Decade!

The world is an incredibly different place now than it was at the start of 2011.

Back then, Bitcoin was weird computer money for nerds. Now it prints around $34,000 per coin.

Amazon stock traded around $200. Now a single share is around £3,200.

Ten years is not a long time yet so much has happened. Just 20 years ago the internet was not taken seriously – but children growing up today don’t know life without it.

It’s possible you remember checking share prices on Ceefax and – if you were around in 1987 – knew the feeling of watching yourself lose lots of money but not being able to do anything about it because the brokers weren’t picking up their phones.

But some things do not change.

In 2020, many brokers failed to perform online when volatility spiked – and still didn’t answer their phones.

This is to be expected in future too if you’re an AJ Bell client – as Andy Bell warned that clients “should not expect to trade instantly at all times”.

Other things don’t change either. Lots of people are calling Tesla a bubble – but the fact that people are calling it a bubble means it’s clear that there are a lot of people left to buy.

If everyone already owned Tesla then nobody would be calling it a bubble.

To be clear: I am not saying that Tesla will go further from here (I don’t know what the price is or care). I’m also not saying that Tesla will go down from here.

The truth is – I don’t know. If I knew, I’d put the trade on! It’s simply an observation which, so far, has made sense. But that can change any time, because nobody can accurately call the top.

One book I recommend reading is Reminiscences of a Stock Operator by Edwin Lefèvre. It talks a lot about trading psychology. There is a lot of wisdom in here – but the quote I often recall when looking at big moves is this one (emphasis mine):

“One of the most helpful things that anybody can learn is to give up trying to catch the last eighth-or the first. These two are the most expensive eighths in the world.”

I think we are…

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