Sometimes it is hard to see the big picture.
I have had a lot of questions about The Eastern Company (EML).
Some readers of this blog have either purchased shares of EML or have used this stock in 'virtual' portfolios. The result either way has been the same. The stock has declined. In fact, many of my own stocks have declined as well.
Is there something wrong with these stocks?
Or is there something else going on? Are our stocks proverbially 'talking' to us? Is our portfolio telling us something?
I believe so. As I have written so many times, it is important to respond to what our stocks do. When they decline, let them go. But do not replace them immediately (unless I am at my 'minimum' stock exposure). Because their actions may well be reflecting a problem not with technique, not with individual stocks, but with the market itself. The market is talking to us through our own stocks.
No matter how brilliant we think we are, how smart we have been and figured things out, the market will bring us back to earth each and every time.
So do not look too closely at any particular holding to figure it out. When things do not appear to be acting as we expect them, then it is time to readjust not our thinking but our perspective.
Like the trees blocking out the forest, our stocks can block our view of the stock market. And the market bears are out. And they are growling. And it is time to be observant and thoughtful as we respond.