HOPE TRUMPS LOGIC!

One of the most important rules in BRONOFF’S RULES is Rule #2: Every Dog Will Have Its Day. And even more important is the rule that follows it: Rule #3: But That Day Won’t Last.

As the author of BRONOFF’S RULES I know the rules inside and out. Yet in the biggest market blunder I ever made I totally ignored Rule #3. Why? Because reality bites and bites…

Here’s how it happened to me: A dog I had owned for many years, a dog that had had a near-death experience when it rolled over and fell under a dollar a share, roused itself. Made an amazing comeback. Then retreated. Then waltzed around the room on its hind legs. Then flopped down exhausted. Then rose to a takeover bid and stayed awake, barking its head off.

And I didn’t sell. I held my breath and hung in there. And sure enough, my stake in what was now the acquirer’s stock doubled again. I then bit the bullet and sold part of my holding. But all of it? No, ’course not. It went up so much...why not more? Plus, it went up so much...think of the taxes! Plus, plus, plus...mentally I was becoming a zillionaire just by holding on.

And then that dog started looking for a place to lay its head. Gently began lowering itself to the floor. But did I sell? ’Course not! Why shouldn’t it go back up, a strong dog like that, knew such great tricks!

Then, inevitably, Rule #3 kicked in. Hard.
What I had left on the table fell off and disappeared. More than $100,000. OW! OW! OW! BOW WOW!

By the time this occurred, I knew BRONOFF’S RULES by heart and had literally written the book. But in the market the logic of probability gives way to eternal hope. That’s the fascination, that’s the beauty of it. That’s why I so enjoyed writing BRONOFF’S RULES, examining the psychology of all the characters in the various markets, financial and social, they chose to play in.

I'd love to know how you have "played by the Rules"—or not. Please share your experiences with me at sambronoff@gmail.com.

Wishing you laughter and luck,

Nao Hauser