Spring is whispering its arrival - I can hear it in the morning birdsong and feel it in the shifting air. While this wasn't Michigan's harshest winter, I seem to have packed some of that cooler air with me during my recent Florida escape.
There's something undeniably hopeful about the changing seasons. Interestingly, the legendary early-20th century trader W.D. Gann noted that markets often exhibit meaningful trend changes around seasonal transitions.
Not every equinox brings a market reversal, of course - but I've witnessed this pattern play out enough times to keep my attention particularly sharp during these periods.
Today, I want to share how my experience in agriculture has profoundly shaped my approach to trading. In both fields, we operate within cycles beyond our control. And I've learned that success comes from moving with these cycles rather than fighting against them...
Making Way for New Growth
When spring arrives, most people immediately think about planting seeds. There's truth to this - I started my first seeds (artichokes) just a couple weeks ago. Though technically still winter, I spotted my first germination days ago.
But spring isn't just about planting - it's about preparation. This week, nature demands I prune my family's 40-year-old grape vines and trim the fig trees in my starter box. While we won't see any green emerging for months, the actions taken now directly determine both the quantity and quality of the harvest ahead.
This might seem like an unusual trading metaphor, but consider the current market:
Volatility is spiking. Many previously reliable trading setups that performed beautifully last year are struggling in 2024 - at least in U.S. markets. (China and precious metals tell different stories, but that's a conversation for another day.)
This choppy environment creates the perfect opportunity to eliminate "dead weight" from your portfolio. Just as leaving excess branches on my grape vines would diminish my fruit production, holding onto underperforming positions will only restrict your portfolio's potential growth.
Remember our primary objective: long-term outperformance comes from owning the strongest stocks in the strongest sectors in the strongest countries.
Don't neglect your portfolio responsibilities. Being a good steward of the land parallels being a good steward of your investments. Nature waits for no one - and neither do markets, which I would argue are simply another expression of nature's fundamental patterns.
Talk soon,
Gianni Di Poce
THEOTrade