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.
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.