Quote of the Day: Know the difference between the wind and the tide!

In an interview for Jack Schwager's Market Wizards series, uber-successful money manager Colm O'shea offers the perfect analogy for why -- as we continue to illustrate herein -- we focus on prevailing long-term trends and the fundamental backdrop:

People get all excited about the price movement, but they completely misunderstand that there's a bigger picture in which the price movements happen. Price movements only have meaning in the context of the fundamental landscape. To use a sailing analogy, the wind matters, but the tide matters too. If you don't know what the tide is, and you plan everything just based on the wind, you are going to end up crashing into the rocks. That is how I see fundamentals and technicals. You need to pay attention to both to make sense of the picture.

 As it relates to volatility, the underlying tide is the ultimate determinant of whether we consider the volatility of the times as something to be ignored or respected...