Have you ever been reading a book and then later that day pick up a completely random magazine and both contain similar key points, that it almost seemed weird? This seems to happen to me often, and since I don’t believe in coincidences, I opted to document it for future reference while discussing some of the concepts and observations that I found to be important. Often times I’ll be thinking about something only to lose it when my next thought pushes the old one out so if I have these thoughts down on virtual paper, they may provide some usefulness down the road.
To recap: 3 unseemingly, unconnected paragraphs that in my opinion are very significant to the overall well being of traders, and if these points go overlooked, will have a negative impact on your portfolio.
– Excerpt from Hedgeye which offers unique market thoughts and uncommon transparency.
The intersection between confidence and fear is one of the most important factors in my multi-factor, multi-duration, risk management model. If you have a market that’s dominated by what the government is going to do next, and the core marketing message of that government is fear mongering about great depressions and keeping “risk-free” rates of return at ZERO percent, the impact on confidence becomes very real.
I don’t need a loser who gets paid to politically pander to tell me how to think about market risk or the bottoms up factors in meeting my employee payroll. Nor do I need them to eliminate the rate of return I have on the hard earned savings in my family’s bank account. What I really need is for the government to just stop and leave me and this market alone. You want a solution, Mr. President? Try that.
~Echart Tolle from “The Power of Now”
“An emotion usually represents an amplified and energized thought pattern, and because of its often overpowering energetic chart, it is not easy initially to stay present enough to be able to watch it. It wants to take you over, and it usually succeeds — unless there is enough presence in you. If you are pulled into unconscious identification with the emotion through lack of presence, which is normal, the emotion temporarily becomes “you”. Often a vicious circle builds up between your thinking and the emotion: they feed each other. The thought pattern creates a magnified reflection of itself in the form of an emotion, and the vibrational frequency of the emotion keeps feeding the original thought pattern. By dwelling mentally on the situation, event, or person that is perceived cause of the emotion, the thought feeds energy to the emotion, which in turn energizes the thought pattern, and so on.”
Excerpt from “Superperformance Stocks” by Richard Love
“We live in the age of the big spender – the politician who loves to spend other people’s money for every imaginable cause ranging from foreign aid to Frisbee research. Washington’s big spending is the primary reason for the large hidden tax – inflation – that afflicts us all. Until the Federal Government gets it’s spending under control, if it ever does, the problem of economic instability, with it’s booms and recessions, spiraling prices and business failures, will be with us. For the investor this can spell opportunity or disaster, depending on each individuals insights.”
- We all act surprised and appalled when our Government passes some piece of legislature that defies logic, yet we fail to realize or we consciously choose to forget that this has been going on for as long as organized Government has existed. Richard Love wrote this book in1977, more than 33 years ago and it’s more true today than ever with the bailout of the week and the threat of QE2 looming on the horizon, which will mortgage the future of America more than it already is. We truly do live in the Matrix, where every new administration is like a new computer program and until we wake up and chose to run a different piece of software this will continue to happen. “This has all happened before and will happen again.”
*On a personal note I don’t believe in any difference between the 2 parties that exist now. Their agenda’s are the same, they just go about it a little bit differently.* - Often times government intervention causes us as traders and investors to become apprehensive about the particular investment climate. This happened to me in 09′ when it seemed like the Government kept changing the rules every week and made it extremely difficult to know what’s what. Banning short sales in financials, pumping liquidity in the markets at will, and bailing out unworthy corporations really made it difficult to trust the free markets. I don’t know how many opportunities that fear based environment cost me because I actively chose not to participate many days in trading, but I’m going to do my best to never let my trading behaviour be manipulated like that again.
- Anybody else starting to think that the Change that Obama promised isn’t exactly what we had in mind? I said this along time ago that this financial crises will not be over until the entire financial industry, or even the entire role of Government in our lives becomes more in favor of the elites who run this country. We are already seeing a transfer of wealth as we move to a more Socialistic structure with the Government becoming a sugar daddy to so many individuals in the system.
- Turn the TV off.If it’s there to cause you to experience an emotion, what Tolle is saying is that it’s normal for most people who do not have the ability to stay present, to become that emotion. This will have a devastating effect on your portfolio if that emotion suddenly assumes the role of your hedge fund manager and starts placing trades on your behalf. And it’s not even the financial cream puff CNBC that is having a negative effect on your mind, it’s everything else from the violence, war, and crime shows that are on TV. What desired emotions do you think they are attempting to stir up inside you? If you’re not ready to turn off your cable yet, at least be conscious of what is happening and ask yourself this question the next time you are watching TV. “What emotion are they trying to invoke here, and is this helping or hurting my mental well being?”
Please share and retweet this information to your networks to stimulate more conversation on the topics addressed here as I’m interested in your feedback.
