What was that again?

Let me tell you a story.

I once interviewed at a hedge fund that was making a major bet on its prediction that the housing bubble would implode.

Smart money, right?

However, that interview took place in early 2003, right before the Housing Index (^HGX) doubled. 

Likewise, a lot of folks were short Netflix (NFLX) last year as it crashed and burned from that $304.79 high hit on July 13, 2011.

However, many a bear’s butt was fried on the 73% rally the stock staged before it finally died out.

So when you have an investment thesis in your mind, ask yourself, “What makes now the right time to bet on this?”

Furthermore, if the S&P 500 (^GSPC) is skyrocketing, it is entirely likely that junky companies rally big-time.

Likewise, if the market’s in meltdown mode, even the best of the best can get smashed.

Apple (AAPL) closed out 2007 at $198.08. But in 2008, even in the face of enormous earnings beats and the halo of the iPhone’s unprecedented success, Apple finished the year at $85.35 — a drop of  57%!

You may be smart, but remember: Sometimes Mr. Market just does not give a damn about what you think.

wrote Michael Comeau at Minyanville