Sometimes when the markets swoon day after day, such as they have been doing recently, I sit here in my office, listen to financial news, watch my positions and the market in general, and I wonder. I ponder the things I think I know about the market, about trading, and when I do that, what I don’t know clarifies, becomes sharper and more focused. This clarity always points me toward a sobering thought – playing the market is a serious game, with serious money. I clearly understand that what I do, the money I invest in what I do, is at risk.
Unmistakably, and rubbing up against what I know is the better path, I feel a twinge of fear. Insidious and creeping, I know if I allow it, the fear will grow into something more dangerous – choices made in the moment of fear.
My fear is real, but I have an edge in controlling it. That edge derives not from any faith that the markets will suddenly gain their collective wits, take a breath, and get a grip on the fear underneath the swoon. This may or may not happen, so I do not rely on that to dispel my fear about the possibility of collapse, the possibility that the avalanche of fear will start and not stop until the selling energy is exhausted. Even though I intellectually understand we are economically nowhere close to where we were in 2008, I still feel the twinge, so I need to control it, and I do with my edge.
The speedometer needle crossed 100. The car vibrated. The night air raced past the windows on all sides. The needle passed 105. I looked over at my friend and he had the weirdest mouth expression, like he wanted to smile but couldn’t quite form it. I was scared.
“Slow down,” I said in a squeaky voice. He responded, “No, this baby can hit 120.”
The front end seemed to bob up and down slowly as the needle crossed 110. The fear now rolled through me. I leaned up and screamed at him to slow down, but he would not. To him it was a game, a test of his own nerve to get that GTO up to and over 120 miles per hour. The needle passed 115, and in that moment of the needle moving, the night flashing by, and the engine roaring, I understood one thing so clearly – he was going all the way and there was not a thing I could do about it. In that instant, I chose another path. I sank back into my seat, took a deep breath, and let it go. I would either live or die in the next few moments, and there was nothing I could do about it. My fate rested in the hands of a person out of control …
The story is true, and the lesson I learned that night has stuck with me. Many times since that teen-age moment of stupidity, I have found myself facing fear. Standing atop a mountain on skis looking down into a steep, snow-filled rocky chute is one example. Another is the 5-foot barracuda that opened and closed its mouth filled with razor-sharp teeth not 24 inches from the tip of my spear as I swam backward toward the boat anchored in the middle of nowhere. In both cases, I exchanged the fear for clarity, a lesson learned in that speeding car so long ago.
When I typed the first words of this column today, I was reacting to my fear about the slide in the markets. Now that I am typing the last words, the palpable fear is gone. What remains is the clarity that I have chosen to play this game, and even though the “speeding car” is beyond my control, I suspect it will hit 120 and begin to slow down, much like what happened that night so many years ago.
Trade in the day; invest in your life …
