Last year (Jan 2003) I was reasonably sure that the US would invade Iraq and there would be a war rally. A group of us on another BB had debated this issue from the previous Sept and we all thought that due to military tactical reasons, Jan to Feb would be the ideal time to launch an attack. We were also reasonably sure it(the initial war) would be a walkover.
Therefore I went long on the FT100 in Jan at around the 4,000 level.... unfortunately the attack did not happen until mid March and by then the FT100 was around 3200 and I was within a whisker of cutting my losses...which despite the subsequent rally I did at around 3,700.
My losses were so great that despite the follow on Baghdad rally and so called economic recovery it took the rest of the year to return to profit and although I finally finished last year with a very modest four figure profit it would have been much greater if I had waited to assess the markets before plunging in.
So this year I will try not to repeat last year’s mistakes and I will await market direction before an instinctive trade. Hope this story helps.
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