Apr 10th, 2008
The Essentials
As an active investor, I love reading Ed Seykota’s Website, which is choc-full of life’s wisdom on markets and just about anything. I picked this up from Ed which I now currently have stuck on my computer monitor(s) as a gentle reminder:
Market traders refer to these as "trading rules" but I’m applying them as a philosophy for living. Like the Tao D’ Ching, the teachings of Confucius or Buddha, these simple statements are essential to living a fulfilling life.
Ride Winners
Second guessing one’s talents I think accounts for at least 50% of "failures" in life. Most people are afraid to fail, they inadvertently fail to succeed. Doubt, especially self-doubt, is quite a dangerous bogeyman, especially if insecurity is tied to the opinion of others. Why people generally avoid recoginition–because they do not believe they deserve it, even if evidence to the contrary already present themselves.
Why fix something that ain’t broke? If you’re doing quite well in something, or even better: if you’re showing some promise in doing something, don’t stop to second guess (like I won’t stop writing crap in this blog to second guess).
Just go ahead and do it. Venture, dream, get it done.
Cut Your Losses
Curiously, the flipside applies to failure. Don’t dwell on mistakes. Commit them, learn from them, and then move on.
How many people, refusing to admit they are wrong, continue to plod on in the same direction, even if it pains them.
That job that will never go anywhere, that relationship that keeps getting sour, that project that can’t simply take off the ground–how hard can it be to just simply shake it off and start anew?
Another definition of insanity (by Steve Buscemi in the movie, Con Air): "Doing something again and again, hoping to get a different result.
People are addicted to failure as much as they are adverse to success. Crazy.
Manage Your Risk
People call me the pessimist, because I always look at the downside to everything. However, folks who think like me regard ourselves as realists. We like to see the worst case scenario–and if we can stomach that, then we have nothing to worry about.
Managing Risk is managing the unknown. For most people, unknown is negative. Anything that cannot be certain, is to be avoided. For me the unknown can easily be positive. Arguably, things can’t get worse than losing everything. However gaining the world is an infinite proposition. Deny yourself the opportunity to gain anything, and you’ve just confined yourself to the limited certainty of a mediocre life.
Managing risk is being aware of your surroundings, your companions, your adversaries and obstacles. It means being an active participant, rather than just simply being a spectator to life’s events.
I sometimes call myself a spectator-speculator. I watch things, and make side bets. To manage risk means stepping in the ring instead. And also knowing that the ring is bigger than you perceive, and that arguably we are all already in it whether we choose to or not.
Use Stops
Draw a line in the sand. Beyond this point you will let go. It does not matter how short or long the line is, nor how thin or thick. What matters is that the line exists, and when it is crossed, you know what to do. And what you need to do, you do without any hesitation.
Stick to the System
Always have a plan, but once you have one, stick to it. Flip-flopping is the most wasteful thing one can do with one’s life. This is a by-product of doubt, and the lack of any conscious effort to manage oneself.
Most people are outcome oriented–they judge things by result, and not by process. This evidently leads to a life where you are at the mercy of the lucky people, who got to life’s spoils early, and now dictate upon you like they deserve the luck.
Luck is a tricky thing. It cannot be predicted. And to a casual observer, true talent and simple luck can appear identical–until failure occurs. The lucky ones do not know how to deal with failure, while those who do become the lucky ones later, regardless of their real talents.
File The News
Two points make a line. A hundred points make a trend. You won’t know where you are going, but where you came from is a 100% certainty. So while we try not to be fazed by events as they happen, we are also conscious of a series of events that can lead to a very logical conclusion.
We read the signs of the times, then file them away. There is no such thing as past, or future, just a continuous moment of NOW. That’s ultimately the problem of most people–living too much in past, or looking to far ahead in the future.
Anyway, thanks to Ed for his essentials. Namaste.
