Tuesday, December 9, 2014

The Market is Your Psychiatrist

""He'll have a long life as long as he never knows himself." - Tiresias to Narcissus' parents

What's the point of money?  Once you have food and shelter, every other desire is purely psychological.  Thus, money for the most part is spent to satisfy a psychological lack.  Unless you are certifiable insane, every minute action is carefully weighted and decided to satisfy your most urgent need.  Unfortunately, for many people, urgent means short term.  Long term results, even if you swear that's what you really want, lack the short term psychological appeal.  A favorite example is the fat guy on a perpetual diet, on a figurative treadmill to lose the same twenty pounds for his whole life.  Does he not know the proper procedure?  Perhaps, but more likely, the long term rewards of a thinner and healthier body is psychologically further away than the short term emotional reward of another piece of cake.

Just like some of you fatties fooling yourself into blaming Big Sugar and McDonalds into making you fat, there are those that blame the Fed or some Goldman conspiracy as the cause of their unprofitable trading.  As always, blaming others for one's own failures is a symptom of narcissism and like my psychiatrist once said: I cannot help you unless you want to help yourself.  The market prods you in that direction relentlessly as it takes your money.  How much you end up feeding it depends on your own ego, and tragically our ego is usually all-encompassing, so much so that you rather go broke than acknowledge its existence.  Luckily my story in realizing this is boring and not worth getting into, but the lessons are still the same.  If you are an unprofitable trader, stop looking for the next hot strategy; look for yourself because he is still a stranger.