Keyzer

There is always an urge to add fresh new capital late in a bull market or often near a local top, and directed towards the more speculative side of the market. (FOMO essentially). Fresh capital is generally weaker handed as the trader increases position size beyond the comfort zone. So it’s easily shaken out once the market turns lower, resulting in a derisking at a low. This greed driven process is how early Cycle investors quickly go from deep in profit to significantly underperforming, then eventually into a full tilt mode of chasing ever more speculative returns. That early entry and discipline is forgotten as the allure of riches takes hold. There is only so much juice that can be comfortably squeezed out of a market. Anything more requires putting your head squarely on the block and a large element of luck.