Stocks and the Art of Sitting

When can you sit?

When you’re comfortable.

It’s as simple as that.

When can you remain comfortable over very long periods of time?

When you’ve bought with appropriate margin of safety. That’s when.

Not enough margin of safety at time of purchase means jumping around and tension everytime the market rumbles.

Do you want that?

Are you investing to be on the roller-coaster day in and day out?

If yes, why are you investing in the first place?

Why don’t you just trade?

Be on your roller-coaster and recognize what you are doing.

There’s nothing wrong with being on the roller-coaster.

However, there’s something hugely wrong with being on it and not know that you are on it.

Instead, you have told yourself that you’ve pickled away your doubloons safely for a lifetime.

With inadequate margin of safety at the time of purchase, nothing could be further from the truth.

Why?

Biochemistry.

It changes when there’s tension.

Due to a changed biochemistry, we make mistakes.

We sell at a bottom, or we double-up thinking it’s the bottom, only to sink further, and then we actually go and sell at the bottom.

Bottomline is, we are likely to make vital mistakes if there’s something disturbing us.

Let’s remove the cause of the disturbance, so that we can go on to discover the art of sitting.

While investing, let’s buy with adequate margin of safety.

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Dance the Bawwdy Music!

..dance the body music

makes you feel so happy

dance the body music

music makes you happy

hear the music play

feel your body sway

hear the dj say

oh what a big smash big smash

dance the body music…

 

Osibisa, was it, late ‘70s?

Yup. 

What an cool swingy number, sung by an unforgettable band!

Disco beat. Rhythm. Easy peasy lyrics. Synth. Floor’s going crazy. Song’s all over the people. People are all over the song. 

Euphoria. 

Why are we talking about it?

Music or euphoria?

Euphoria. 

I used the music element to paint a picture of euphoria in your mind.

What is it about euphoria?

Why does it push me on alert?

Is it that I don’t wish to enjoy my life?

What could I have against euphoria?

I’ll tell you. 

Before I tell you, I’d like to mention that I love the feeling. 

It fantastic being in the feeling. I’ve got one eye on my alerts though. 

WHY?

We make our biggest mistakes when hit by Euphoria. 

Yes. 

Surprised?

Don’t be. 

Under the influence of Euphoria, our biochemistry is so, so different. 

We’re far from peak. 

Our defences are down. 

We are highly capable of plunging into…an abyss…oblivion…call it what you feel is befitting. 

We let go of safety. 

We bet big. 

We bet dangerous. 

We bet the farm.

That’s what euphoria can do to us. 

I do feel euphoric, at times. 

A trade’s gone well. 

A deal’s come through. 

Stability at home. 

Euphoria. 

However…

…as I told you…

…one eye is on my alerts. 

If even a single thought emerges of betting big, bigger than my normal size, well, my predefined red-alert also goes up with such a thought. 

I see my alert’s red flare, and the unwanted thought subsides. 

I am able to sick to within the confines of my position-size rule.

If even one thought emerges of trying a new untested line, just because all current lines are doing ok, well, my predefined strategy saturation alert also goes up with such a thought. 

I remind myself that I’ve decided upon financial strategy saturation, and don’t plan to add a new line, at least not in a hurry or upon an impulse. 

I’m able to stick to my strategy saturation decision. 

Are you understanding what I’m trying to tell you?

If yes, I’m so happy for you. 

You’re not leaving it for later. You’re understanding it without being hit by the aftermath of a decision taken under the influence of euphoria. 

Cheers mate!

🙂

What’s bothering you today?

Get it out of the way.

Why?

Bother takes a toll. 

Focus goes away. 

You don’t wish to see your trade. 

That’s a pathetic condition to be in…

…as a trader. 

When you’re in a trade…

…you need to monitor the trade. 

How will you monitor a trade…

…if you don’t feel like looking at your screen?

What’s causing your indifference?

Bio-chemistry. 

Resulting from?

The spot of bother.

That’s why, get it out of the way.

Trade gone wrong?

Kill it.

Spouse problem?

Address it.

Child matter.

Deal with it.

Bring your environment to an immediate logical conclusion…

…if you can.

Why?

You’ll trade like a king…

…or a queen…

… whatever title you prefer. 

You’ll see clearly. 

You’ll want to open your terminal. 

Your ideology will be aligned with your trade. 

You’ll be making money. 

That’s why.