Victim of Cognitive Dissonance....

http://hungryforoptions.blogspot.com/2009/03/ken-lewis-is-back-with-more-good-news.html

I was looking at my previous posts from last six months (check the one above for example) and boy was I disappointed to notice how I was hypnotized all along with my negativity.... the term psychologists use for this behavior is cognitive dissonance. I surely was thinking in only one direction and that was my reality back then. I even feared (correctly so) that March 9th would go down in history as the day that marked the bottom for this crazy financial crisis... Looking back, it surely did just that... I definitely learnt something valuable this year that I thought I had learnt before and is often heard everywhere, i.e., trend is your friend. All I tried to do all year long is to pick a top, while missing out on the biggest rallies that I have seen lately in many specific equities.

I still feel one thing that I've felt all along, i.e., the market is overbought and I just don't want to be the last one holding the bag buying stocks right at the top. This fear has kept me from buying and stay bought all this last 400+ points on $SPX. I guess Buffet is somewhat correct in saying, "buy when others are fearful and sell when others are greedy". I would modify this and say "Buy early when others are still negative, and sell early when other are still positive". I guess we are almost at a point where the negativity is still there and so I think we may just go one more leg higher before coming crashing down. Unless, the earnings this week act as a catalyst that just does the job of making everyone realize that the worst may still yet to come.

I am still going to wait it out and am prepared to sell as soon as I see that first big spike in $VIX for 2 days in a row!