HomePublicStockhold Syndrome : Are you Married to your Tormentor ?

On August 23rd, 1973 two machine-gun carrying criminals entered a bank in Stockholm, Sweden. Blasting their guns, one prison escapee named Jan-Erik Olsson announced to the terrified bank employees “The party has just begun!” The two bank robbers held four hostages, three women and one man, for the next 131 hours. The hostages were strapped with dynamite and held in a bank vault until finally rescued on August 28th.

After their rescue, the hostages exhibited a shocking attitude considering they were threatened, abused, and feared for their lives for over five days. In their media interviews, it was clear that they supported their captors and actually feared law enforcement personnel who came to their rescue. The hostages had begun to feel the captors were actually protecting them from the police. One woman later became engaged to one of the criminals and another developed a legal defense fund to aid in their criminal defense fees. Clearly, the hostages had “bonded” emotionally with their captors.

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While the psychological condition in hostage situations became known as “Stockholm Syndrome” due to the publicity, the emotional “bonding” with captors was a familiar story in psychology.

So the big question that each and every PM sector investor or trader needs to ask themselves is this: “Am I married to a bad strategy. That is, have I bonded to the bear?”

In the final analysis, emotionally bonding with the PM sector bear was actually a strategy for survival for PM stock sector investors over the last 5 years. In fact, it actually improved the chances for survival of those investors, for without the emotional bonding, they may have completely lost it mentally.

However, on the down side, it also assures that the PM stock investor experiencing “Stockholm Syndrome” will not be very cooperative after the bear went into hibernation, and the bull appeared on the scene. The abusive rhetoric against the bulls, with the current impulsive moves UP in many PM stocks, is an example of the inability to shake the mind set. In real life, victims will even physically attack police officers when they arrive to rescue them from a violent assault, as they have “bonded” with their abuser.

So the bottom line is, are you married to a bad strategy? That is, do you sell the rallies, take the money and run back to your abuser, the bear, who will surely continue the abuse you so desire?

The alternative is to embrace the bull, despite the psychological difficulty of doing so. Deal with it and face your demons, as if one is constantly reverting back into the “syndrome” one will always have difficulty sitting and holding in a bull market.

Sit tight and prosper. Spock.

About Spock

Passive aggressive market trader and mining analyst, with 30 plus years experience in the global markets, across all sectors, with a focus on mining and precious metals resource stocks.


Comments

Stockhold Syndrome : Are you Married to your Tormentor ? — 9 Comments

  1. I can see the logic of your post in many of my friends, who are now afraid to invest in the PM sector. One other similar situation where at least I used to be afraid is, to let go of stocks that I had bought and expected them to go up, but they went down, and now I hate to admit my judgement was wrong. It’s the ego that always wants to be right and hates to admit it is wrong, and hates to take the loss. But if I stay in the losing position, I never make the money back. With Spock’s picks, its has been the easiest investing I have ever done – just follow his lead. I did do well in the internet mania, but who didn’t. Also, I lost a lot in the crash in the end. Plus for all the time I put in researching for internet stocks in the 200 mania, in comparison, this is easy street for all the work Spock puts in for us. So the best thing to do is to check your emotions at the door as Spock says, and follow his lead. Thanks again Spock – you Rock!

    Banimal

  2. Mr Spock
    great Editorial for a Saturday morning read.
    the twist here with Spock-Rocks is you are locating Jr explorers with good management teams, that are still under the radar and very early Stage 1 on the charts. The herd is chasing the sector ETFs and popular LG caps, a bit like watching the kids chase the soccer ball all over the field in an U-6 soccer game, with the parents screaming on the sidelines

    Just arriving here a month ago, I missed the early move back in February, so I’m tending to accumulate more of the positions that you’ve recently added to the portfolio, and gradually adding others – when they do pullback to the 9ema, 13ema, or if really lucky … to the 34ema. That strategy has worked pretty well in the last month.

    I’ve not yet been able to snag any of these yet on a dip to the 9ma or 13ma, using the OTC market: KAM.V, NMI.V, TGZ.T, CNL.T, ROG.V, and MAX.T

    hope IB will allow some easier trading with TSX and ASX, and maybe catch some of them using the right bait at the right time. Fishing for the big ones, one needs the right guide, and I think we have that here

  3. Spock,
    In the last short P.M. bull market, 2011, 12, I decided I would outsmart the market. When it was done, I found that I had actually lost money during that run up.
    That was very discouraging. I’m not that smart. Not this time. You can’t fight yesterday’s battles. Recognize an up market, get in, and ride to the end. Otherwise, you will continue to buy high, and sell low. Even in an up market. I know!
    lc

  4. I can relate to the bear market in precious metals since I had started investing in bullion from Apr 2013 after the huge $200 smackdown in gold. I bought the dips but as each year went by, it was a drain on both my emotional capital and physical $$$ capital. And those short lived false breakouts in gold and silver over the years can really entrench in you a false belief that the precious metal prices will never see a strong sustained rebound. Most of my stacker friends had already given up on stacking even before 2015, so my stacking journey only got harder. The only thing that kept me going was an even stronger belief that we have a bunch of Central Banker circus clowns running the global economies, that one day I will hit paydirt with the bullion I had accumulated.

    I recognized the change in the trend when I saw gold breaking the 200 MDA decisively while the global markets sold off, when miners led the charge up and when perma bears analysts like Yamada Louise started turning bullish on precious metals. Yet, it was very difficult initially to position myself in mining stocks in end Feb after the sharp run up since I was still under the influence of the great bear. I only added to my positions gradually after I was convinced that every minor pullbacks in the month of March was bought.

    I believe precious metals and mining sectors are in a secular bull market, and a massive revaluation is imminent. I am taking no chances since I want to learn from the best and invest with the best, which is why I am here.

    Mr Spock always like to say Sit Tight. I would like to share this – Hold on to your balls real tight and just buy, the greatest risk is to be totally out of this market.

  5. Marauder, my experience and sentiments exactly. From other posters here who are looking for ‘entry points’ – that’s going to be the hot money. Greed vs. Fear – A) Because I have a multi year horizon, my entry point doesn’t matter the chance to get a few % today (or lose a few % pts) is far outweighed by the potential gains in the future, if you’re not in now you might get lucky or you might be chasing but either way Greed = hot money. Get in sit tight – the CB’s will do the work for us.

  6. Mr. Spock and others, thank you for this post and others for sharing their thoughts. I am a victim of the Great Bear…it left a deep emotional and psychological scar…and a large $$ hole in my investment portfolio. I have always believed that the Universe guides us to the proper place when the time is right. I believe this to be the case for me and for finding my way to this website.

    Mr. Spock, your advise to believe that the bear is in hibernation and that the bull is now with us…and to keep reminding us, is
    very helpful and encouraging.

    God Bless you and all those who are with us on this new journey !!

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