Big week ahead
You may read this headline and wonder what on earth I am on about as there isn’t anything amazing happening this week. OK a few high profile things like the Champions League football, but generally just bits and bobs as we descend headlong into the winter.
This time last year however, we were well in the grip of an incredibly cold spell and it pretty much wiped out all the sports action. So this year we are assured of a really good week. Well, at least in comparison to last year anyhow! That’s why I have a big week ahead.
Even this obscure reference to the weather reveals something about the way markets work. When we have a cold winter people anticipate another cold winter the following year. Judging by the number of snow shovels being sold at my local Tesco’s people are making the same mistake this year. Last year was a 30 year odd exception and just because it was bad last year doesn’t mean it will happen this year. Yes there is a demonstrable chance it will, but it is most likely that it wont.
In all markets I watch, there is a common propensity for people to look at the most recent history and start projecting that forward. This often results in demand overshooting in either direction. Identify this overshoot, have the mindset to swim against the crowd and its possible to profit from this behaviour. It’s work wonderfully well for me over the years.
Go short snow shovels!
Category: Horse Racing
