This blog post originally appeared on RealMoney Silver on Feb. 4 at 7:41 a.m. EST.As a card-carrying and a grizzly bear who views the investment/economic world as a glass half-empty, it is hard for many to understand why I try to capture countertrend rallies in both bull and, particularly, in bear markets. I do it for the following reasons:
- My day job is managing two hedge funds, and I scratch and claw to register profits for my limited partners regardless of the external environment.
- While I always develop a baseline market expectation (hopefully, through logic of argument and analytical dissection), I am often wrong, so it is helpful to have hedges.
- There are always sectors, groups and individual equities that run counter to the primary trend; there is both a bull market and a bear market somewhere at all times.
- Stay permanently flexible.
- Stop your losses.
- Let your profits run.
Know What You Own: Goldman Sachs operates in the diversified investments industry, and some of the other stocks in its field include Morgan Stanley ( MS - Get Report), CME Group ( CME - Get Report) and NYSE Euronext ( NYX). General Electric operates as a conglomerate, and some other conglomerates include United Technologies ( UTX - Get Report) and 3M ( MMM - Get Report). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.