Liquor stores are still operating as essential businesses during the COVID-19 pandemic – and that might be a great thing for your portfolio…

That’s because pounding 12 cans of Miller Lite this evening might just be the secret to making smart investment decisions when the market opens tomorrow.

That’s the advice from one of the most successful traders in history, anyway.

A couple of years ago, billionaire hedge fund manager Paul Tudor Jones gave a talk at Goldman Sachs in New York. One of the anecdotes he shared was about Richard Dennis, the Chicago commodities trader of “Turtle Trader” fame.

In the early 1970s, Dennis borrowed $1,600 from his father and reportedly turned that into about $200 million over the next 10 years.

By the time he retired from trading, Dennis was known as the “Prince of the Pit.”

According to Dennis, he did his best trading when he had a hangover from the night before.

“Not many of his colleagues would share Dennis’ belief that it’s advantageous to enter the vast trading room ‘half dead’,” notes a 1976 profile on Dennis, then only 26.

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It takes away emotion. When you’re hungover – or sick, he says – you show up to the trading floor flat, unmoved by the excitement of the price action around you. As a result, you don’t let emotion creep into your decisions. Every move you make is mechanical.

And with the heightened emotions in the current market environment, there might be something to say for making a wicked hangover part of your investing plan.

I’m mostly joking, of course.

You don’t need to wake up with a pounding headache in order to avoid making heinous portfolio decisions in 2020.

But it’s a pretty important reminder that human beings are basically hardwired to make bad decisions when under stress.

And right now, folks are under immense stress, both in their daily lives and when it comes to their portfolios.

That’s why it makes sense to drown out all the noise and trade like a robot.

Trade according to some kind of predetermined plan or system – not by the seat of your pants.

People often mistakenly think that the point of using a trading system is to eliminate losing trades.

That’s not quite accurate.

Fact is, if you’re trading in any financial market, you will have losers.

And while any investor’s goal is obviously to have winning trades overwhelm the losers, the point of using a system isn’t to totally eliminate losses. It’s to prevent losses from getting in your head and keeping you out of the market when the next buy signal comes after a string of bad luck – or a pandemic – knocks you off balance.

We’ll continue sharing research in these pages to help you build an investing plan for this market.

In the meantime, it’s more important than ever to “trade like you’re hungover.”

And if all else fails, you can always head to the store and grab that 12-pack of Miller Lite…

Sincerely,

Jonas Elmerraji, CMT