Soros is also the best loss taker I’ve ever seen. He doesn't care whether he wins or loses on a trade. If a trade doesn't work, he's confident enough about his ability to win on other trades that he can easily walk away from the position. There are a lot of shoes on the shelf; wear only the ones that fit.
Stanley Druckenmiller
Confidence in your skill is crucial in this game. Those who believe in steady gains over time will stay in the green, while those chasing the big score may crash out.
Think of Warren Buffett - does he drop his whole portfolio on some hyped penny stock, hoping to retire off one trade? Nah, he knows real wealth is a marathon, not a sprint. Same with day traders like Tim Sykes - yeah he has home runs, but it's the countless singles and doubles over months of grinding that fill his bank.
It's easy to get caught up in some "opportunity of a lifetime" and drop your stack hoping for Lamborghinis. But the smart money knows not to put all their chips on black. No matter how good an idea seems, one trade can never change your life - only time in the market building skill and experience can do that.
Remember the lotto? We all know the odds are against you, yet some hang their dreams on random numbers. Trading with that mindset is no different - you're betting against the house. But stay disciplined? Stick to solid strategies? Over years your talent WILL pay off if you give it the chance.
The guys focusing on one payday instead of their long game clearly lack faith in their own abilities. They want a miracle instead of committing to the process. But as Buffett says, someone with IQ of 150 who loses patience will always lose to someone with IQ of 100 who have it. Keep the faith in yourself and let compound interest do its magic - that's how fortunes are truly made.
Strong opinions, weakly held
Personal Experience: Often when I feel super confident about an opportunity, in hindsight it turns out to be a trap. I think many traders can simultaneously think they've found an amazing play, when really it's the market conspiring against them. Rather than isolated decisions, movements are coordinated traps that catch multiple players at once. Keep your guard up!
Flexibility is crucial. A great criterion for judging whether someone is smart is if they can simultaneously hold two different (in trading, opposite directional) viewpoints in their mind, while still being able to act normally (the viewpoints coexist organically in a coherent way). There have been many times when I planned to go long, for example, but while waiting, I slowly discovered and converted my preconceived biases. I realized there was actually potential for a short position, and ultimately succeeded in profiting from a reverse short trade. Forcing yourself to consider the possibility of the opposite direction can effectively help the brain resist bias and recalibrate your stance.
Strong opinions based on consilience: the principle that evidence from independent, unrelated sources can converge on robust conclusions. This notion from science and history has great potential for deeper exploration in the realm of trading and investing. I look forward to discussing this fascinating topic in more detail when the opportunity arises.
I have nothing against trading! There are some brilliant traders out there, but the fuck if that isn’t hard work. Plus I get paid stupid money in my day job - I want to throw the cashflow I get from being smart into things that are as close as possible to a passive investment (passive meaning that the thesis is strong and I just need to wait).
As I was reading an article by Bob Bedford, it got me thinking about my future plans. To be honest, I feel like I've really gotten the hang of trading and have developed a sufficient edge compared to the average traders. But as I look ahead to my golden years, I wonder if I should still be actively trading at that age. I might still do it occasionally, but probably not as frequently as I do now.
Here's the thing - if most of my income is currently coming from trading, what happens when I start trading less often or even stop altogether? My nest egg could start shrinking bit by bit. And even if I do keep trading, I doubt my older self will have the same energy and risk tolerance as I do today. Let's face it, as we age, our ticker isn't as strong as it used to be. It might be better to shift towards more low-key activities that won't get the heart racing too much.
So here's where my head's at right now - I'm thinking that I'll need to gradually transition into more passive investments, at least for a good chunk of my portfolio. You know, the "slow and steady wins the race" approach.
It's still a work in progress, but that's the general direction I see myself moving in over the coming years. Gotta start laying the groundwork now, right? Anyway, just some food for thought as I plan for the future.
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