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Optimists versus Pessimists: What about Realists?

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Optimists versus Pessimists: What about Realists?

The investing professionals nowadays tend easily to label one another as “Optimist” or “Pessimist.” What does it mean? When someone is labeled as an Optimist, the market associates her or him as a kind, positive, good, and sound woman or man because she or he is forecasting bullish market trends. He would tend to open only Long positions by buying low and selling high. Why they attribute a positive connotation to the optimists? This is because the majority of invested money in financial markets is in Long positions in the so-called buy-and-hold portfolios. Furthermore, the mutual fund managers are allowed to trade Long positions only. This is the way they earn their bread and butter and make money for a living. They know that their biased optimism for forecasting permanently bullish market trends, even in times of crashing markets, brings them more business and bonuses. The Optimists form the major bulk of the investing and trading crowd. They tend to hate the Pessimists. This is because, by nature of their buy-and-hold investing strategy, they are bound to promote bullish trends at all times and by all means. The Optimist’s dream would be a permanently linear up-trending market without any correction. At the same time, they tend to qualify the opening of Short positions dangerous or risky and discourage investors from taking Short positions. Consequently, their views seem universally optimistic regardless of the real market trends, whether up or downtrending.

On the other side, there are the “Pessimists.” They tend to permanently hope the opposite trend of the Optimists, only bearish market trends. In turn, the Pessimists’ dream is a linear and permanently declining bearish trend without any uptrend.

Personally, I believe there is also a third category of trading professionals, the wise “Realists.” Who are they? This group tends to predict the market real trends objectively at all times, upward or downward, in an unbiased manner and open positions according to the predicted market trends, Long or Short. Therefore, they are Optimists when the markets are bullish and Pessimists, when bearish. They are Realists.

Who is right? Who is wrong? Both are wrong questions. Investing and trading are not about being right or wrong but about making money at the end of the day. Would you agree? In this context, neither the Optimists nor the Pessimists have the optimal strategy for maximum gains, only the Realists may have. In term of right or wrong, whoever makes the biggest gains in a given period of time, is relatively more right compared to others.

Money Printing Strategy promotes the Realists’ strategies. It determines the market trends objectively and in a timely manner. It then provides clear signals for the opening of positions, Long or Short, accordingly. This way, the MPS traders can ride both sides of the waves, sometimes upward and sometimes downward, whatever side the market happens to offer a trading opportunity. This is why the Realists can outperform the Optimists and Pessimists.
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