Concentration is definitely a challenge in this market if you're trying to get an overall picture of the sentiment surrounding the broader market. We have lots of single stock noise. For traders, that's not necessarily a bad thing, but it can be. It can be easy to get ensnared in a single story and stay on it too long. Rev's done a great job moving on from GameStop (GME) and the likes. I'm not sure Bob Lang ever got drawn in by those names in any meaningful fashion. I'm still hanging around them because I'm focused on the option disconnects. They are waning significantly, but I've still be able to get paid on a handful of risk-free trades (with upside potential) over the past few days. Watching that market this morning, I feel as though that will come to its end today until we see another 25% type of day. Normally, I'd laugh while typing that but, in this market, that could be tomorrow or later today. Or we may not see it again for quite some time.
For investors, this is more challenging. We have some insane moves in individual names that never made headlines in the past compared to their present state. Add in earnings season hitting high gear and we have the recipe for paralysis by analysis. If you're just watching the headlines, you could have problems seeing the forest through the trees. My recommendation would be to take certain tickers off your screen, mute your social media feeds from those tickers that you know you'll never trade but you continue to watch, and cut down on the noise. It's probably not your game.
What's I find enlightening is I pulled up my core watchlist from late 2017 and early 2018. These were the names I saw with huge upside and growth potential, stocks not correctly valued. It was heavy in cloud names. It included The Trade Desk (TTD) way back at $50, Alarm.com (ALRM) when it traded in the $40s, Veeva System (VEEV) in the $60s, and many similar names. The point isn't I'm bragging these names were home runs, they were, but I sold out long ago and didn't reap those huge benefits. The surprising fact for me was I realized I don't watch these stocks much any longer. Sure, I check out how they are doing to get a temperature of the market but I'm not trading them.
If you're a trader, you either lock on a core of stocks, maybe 10 or 12, and trade only those, or you create fluid watchlists, ones that change with the ebbs and flows of the market. It's important to identify what rings true to you. I'm in the fluid group. While I might find consistency with a core, I've learned it's more difficult to hit the home runs, let alone the grand slams, in a core group. Now, the fluid group will often have a core for a few days to a few weeks, and I will save them so I can look back, but this approach of stock hopping works best for me.
This is a great time to look back over the past few weeks and reflect on how you felt or where you found your eyes. Compare that to what kind of trader or investor you are (or think you are) and see how they fit together. Was it a distraction or the creation of opportunity for you? That should help you adjust moving forward in what you have on your screens, in your social media, and on your mind.