Another lazy cut-and-paste.
Re: Art Cashin Concerns/ A Cool Hand newSubmitted by 2nd_ave (4936 comments) on Tue, 11/09/2010 - 19:32 #73873 (in reply to #73869)
Rather than try to time the market, though, I'm just sticking with my longs. I mean, how many of us are going to get out at the top, wait the 5% pullback, and then buy back in? Even Saut was calling for a pullback 30-40 points ago in the S&P. It might just pull back to there, at which point if you got out at 1,180 would you be buying back in?
tof- Personally, I can no longer tolerate a 4-5% pullback in the broad market without taking action- those days are long gone. My mental stops these days limit losses in the neighborhood of a tenth of that. I'm tired of trading- no doubt about that. But for me to trade with the kind of 'tude I need to succeed (to be 'in the zone,' if you will), means only allowing hits I'm able to shrug off overnight.
Your risk tolerance is much higher, and there's nothing wrong with that. In response to your question- were I to exit the market near YTD highs (which I have- currently >95% cash with starter positions in GE and BAC), I would have no problem buying back in after a 30-40 point drop in the SPX. It may require more agililty or more 'work,' but that Taoist state of mind (where I'm able to approach trading with confidence) more than makes up for it. And we all have individual risk thresholds below which we're able to 'play cool.'