Buddhist teacher Pema Chodron calls it “being comfortable with uncertainty” – being willing to take every aspect of reality as the starting point, without wasting energy wishing things were different, without denying reality as it is (even if your next step is to work toward changing things), and without needing to know what will happen in the future. “The truth you believe and cling to makes you unavailable to hear anything new. The best thing we can do for ourselves is to be open to an unknown future.”
I liked this quote that I picked up from a now forgotten newsletter that I read (Gartman?).
Anyway the point of it from an investing perspective is brilliant in my opinion. It allows me to accept the inevitable losses with less emotional damage. In my younger trading days I had a tendency to want to get “even with the market” for not doing what it was supposed to do. I remember reinitiating trading positions when I had just got stopped out in the same product and on the same side—with the inevitable result of more losses.
Now that I am “wiser” (notice the quotation marks) I realize that I may never know why my analysis was wrong–or I will find out months later. It really doesn’t matter if I ever find out and no matter how many times I have read this simple advice I even now disregard it—to my sorrow. Maybe someone out there can explain to me why the hardest lessons must be relearnt time and time again.
By the way–I now have a personal trading rule that I make every attempt to follow. If I get stopped out of a position I am not allowed to re initiate any position in that commodity/stock/whatever until 7 calendar days have passed.
The latter may cost me sometimes however, anecdotally I believe it has saved me a fortune. Let us hope that I don’t get stupid (again) and forget it.
Funny I notice that most of my stupidity occurs when I have had a good run!
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