In our Explosive Options chat room, we talk about the P-word (patience) every day, sometimes several times a day. In trading and investing, there is nothing more important than being patient.
The difference between panic and patience could be quite costly to your wealth and your mind. But patience comes from different sources -- experience being one of them, seeing the big picture is another.
The future is uncertain, of course, and most of us are raised or trained with the notion of being somewhat risk-averse about the future, if not totally risk-averse.
Years ago, I had my share of losses because I could not be patient to wait for the desired move to occur. That was due to my lack of knowledge, which meant I was just trying to guess points of entry and exit.
After years of failure, I managed to overlay the technical analysis tools on top of option trading to help restrain my urge to get out of a trade too soon. That patience recently paid off in a trade we did with Splunk (SPLK) , an option trade we booked at a near 200% winner after it was down sharply at one point during our ownership.
Investing/trading is a risk game. However, in our minds we believe we can forcefully take that risk out of the equation by simply stepping aside from the situation we are uncertain about.
Most of us have this instinct, it is a survival trait. The risk-taker in all of us likes the potential rewards at the end of a timeframe if we stay in a trade or investment, but we don't like the wobbly path to get there.
Apple (AAPL) -- a stock held in the Action Alerts PLUS charity portfolio that Jim Cramer co-manages -- is a great example. Those who had been patient throughout the challenging times during the '90s have been handsomely rewarded with 20 years of a sharply rising stock price.
Did you have doubts about the iPod? iPhone? iPad? In Steve Jobs or Tim Cook? We heard all of the naysayers along the way, but this company paid back loyal and patient shareholders with incredible wealth.
But Apple is not the only one. There have been great story stocks that have made meteoric rises through history and made some investors rich beyond belief.
Today it is the bitcoin craze -- some investors are making money hand over fist. Is this a bubble about to burst? If you ask anyone who has been investing/trading in bitcoin, I can tell you their answer to that question: It doesn't matter, I don't care!
Those who have ridden out the doubt and uncertainty are posting robust gains in this and other cryptocurrencies. They were not swayed by the chatter, propaganda talk and "finger waving" by those who missed the boat.
Being patient and managing the trade/investment accordingly is on those who are on board -- good for them for taking the risk and waiting patiently for a payoff.
Perhaps this rage is at the early innings of the game, and perhaps another boom like Apple's is upon us.
But you have to wait for it!