Wednesday, November 10, 2010

What does coaching junior high football players to perform a trick play have in common with the markets? More than you think.

In Texas, football is a sacred part of the Texan way of life. Getting ready for High School football is a serious matter for Junior High players.

Does the notion: it's not if you win or lose, but how you play the game that matters apply to operating in the business of the markets? 

my response to the question is: These matters are beyond my control, so I don't care and will act accordingly. Therefore it doesn't matter.

I am a Christian, and I can only imagine the thoughts, opinions rolling through your head now. 

Some may be saying to themselves something like this, "You can't profess being a church going, Christian and say that it is acceptable to operate in these activities. You elitist hypocrite." Making money is no sin, making money more important than God is. I will confidently leave the judging up to God in terms of my activities. 

The good thing is, that if reading this post thus far has got you uptight and wound up, or somewhat agitated, you can thank me, because I have most likely saved you from losing a significant amount of money. You should probably do yourself a favor and stop reading. 

For those of you reading that have even the slightest understanding as to where I am coming or going with this...then I am talking to you.

It is in such subtle ways, through tweaked belief systems, moral dillemnas, hope, fear, greed and ignorance, the astute investor with a plan can extract real money from the markets. Don't even think you still don't have to work for it, because WE all have our plans, systems, and processes, that you have to go against.

One can easily observe the action on the field of football, but the markets are comprised of more which is "unseen" than what the action shows you.

Let's pull an investment learning lesson from this clip courtesy of Business Insider. Roll tape

This is just the kind of play, scheme, and antic the markets play over and over against unknowing traders many times. The traders who consider themselves experienced are regularly duped just the same, if not more, due to their own overconfidence bias

Much of a trader's failure has to do with a lack of process, method or system, which ultimately leads almost any participant down the same path. Where emotion and decision making collide. Everyone has an emotional breaking point, and the market attempts to draw it out in every participant.

Beyond the ethical and moral arguments, my point, is that, yes this is how the tape rolls. As an operator in the market, I will not be able to trade successfully using my personal values, attitudes, and beliefs to dictate my behavior.  Nevertheless, a trader's mindset is extremely important. 49% is emotional stability, 48% mental stamina and thinking, 3% is execution activity. I want to expand on this in the future.    

Participating in the markets affords one the opportunity to learn about themselves to a significant degree. Making and losing money will school you on just who you are and challenge any belief system to it's total core.

If you do not stand for something, you WILL fall for everything. Trick plays like this in the market's will be very hard to operate through without a system, because the market's clues are subtle. You are kidding yourself, if you think you are going to easily extract significant, if any real money out of the market from the obvious or even the news.

Gerald Loeb, a proven market speculator, stated it best when he was quoted, "what everyone knows, is not worth knowing."

Without being grounded and without a system, these "tricks" and more, will take your money every time. What has grounded me is my Christian beliefs, which have carried me to Hell and back, nevertheless, without a proven process applicable to the market you are operating in, your results will be uncertain.

Just as character, integrity, character and the spiritual belief system have their place in our lives. Battle-tested methods refined and built with a solid foundation applied to the markets will take you to the bank.

As an investor with too many hours of experience to admit, I have learned a lot and made a lot of money. Yet do not be lulled into thinking that just because someone has a lot of experience or money that they are good at what they do. It is not about the years of experience or even the amount of money currently in the bank account, it is about the quality of the experience that matters. This is what keeps your money in the bank. Making money is not the hard part, keeping the money is.

In such terms, the notion that "how you play the game matters much more than winning" applies. Relative to actually trading, in my opinion it does not matter save* insider trading, intentional price manipulation. 

There is the rub. From my research spanning back to the 1500's and lifetime experience, that video clip demonstrates a lot. The coach that ordered that play was willing to win through trick's and extreme deception, not skill. The young players did what they where ordered. Just like corporate employees do what they are told. Once they realize what they have done, is after the fact.
Much of this all narrows down to the human trait of selfishness.  

If you cannot handle the heat get out of the kitchen. Even if you can handle the heat, eventually you will get burned out without a very solid internal belief

system coupled with an evolving battle-test method applicable to the market.

except; but: All the guests had left save one.

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