Pain

Yesterday I watched my cat Edison jump up on the counter and walk across the stovetop. It’s one of those flat glass type ones and he sat down right in the middle of it and gave me the look that said “how bout adding some fresh water to my bowl, or do I have to get it myself”.

Years ago, I purchased some stock in a small company from Florida that imported various products from China, it was trading around a buck and seemed to me to be sensible and I bought a large stake by my standards at the time. I followed it in the newspaper everyday as it went higher and higher and eventually reached over $8. I was newly married at the time and needed household stuff so I sold out and used the money for what we needed.

We have a garden and in it we grow all kinds of stuff including over the last few years some awesome habanero peppers. Our oldest daughter loves green peppers, always has, will eat them like I eat Doritos, as a snack (As you can see Intellect and good sense skip a generation). She picked a small pepper off one of the plants and took a bite like you would of a sweet green pepper (maybe that skipping a generation proposition is incorrect) and I watched with an evil grin as nothing happened and she finished it and left.

The cat got his water, I made some easy money, my daughter enjoyed a snack.

I took precautions to prevent the cat from being able to reach the countertop, every other $1 stock I bought for years after tanked, and the next pepper my daughter picked off the very same plant was so hot a tiny bite required about 20 minutes of eating wonder bread and drinking about 6 gallons of water, milk and soda to stop the crying.

The cat’s the cat, and it’s my job to see he doesn’t get hurt around the house, so I have to make sure there is nothing he can climb that would allow him to get to the countertop, which I did. But if I am not vigilant he undoubtedly will jump up onto the stovetop again. I don’t buy penny stocks anymore, and my daughter asks if it’s “one of those hell peppers” before she takes a bite.

We humans are interesting, we are motivated by success, and we learn from pain.

Every lesson I have learned that makes me a successful investor and trader today is the result of enduring painful lessons. I was gleefully thinking I was a genius as I strolled into home depot with my fat wallet after selling out of that one stock. What I had done was set myself up for a painful lesson in the future that I was less ready for or expectant of. In fact I made several more blunders after that because I had succeeded on that one. Had I endured a little pain I would have learned (one would hope) a lesson that would have spared me much more pain down the road. Having spent a great deal of my life in this game and associating with other folks of similar ilk, I have come upon the realization that this is a commonality that successful traders share. I have not met a single one with any time in the game that did not share this sentiment. The richest, most successful people I know all seem to share an affinity for relaying the stories of pain they overcame much more so than triumphs they achieved. Pressure makes Diamonds, a life without pain makes you Paris Hilton, if you think the latter is a more attractive path than the former, I hope your ancestors didn’t, otherwise refer to the above.

Now I embrace my pain, I realize the difference between the battle hardened veteran and the green recruit can be measured by the pain he has endured. Now don’t get me wrong, I am no masochist, one thing pain has taught me over the years is pain sucks, but I am also cognizant of the fact, and it is a fact, that in this game as in life, pain is coming at some point. Since it is inevitable that we will experience it, and we all agree that it sucks, we must acknowledge it, learn from it, or it gets worse.

I rarely dedicate much time to analyze winning trades, I book the profit, and move on. Alright I allow a little smug self congratulations, but I try not to let it take hold for long. I do spend much time doing forensic analysis of losing trades or market conditions that go against my thesis, because it prevents repetition of errors at least in theory, maybe minimizes repetition of errors is the fact.

What can we conclude from this? First is that pain is coming, so you better be ready for it and make provisions to minimize it if you can. Second that it must be viewed as an opportunity to learn, and in an odd sort of way, to prosper over the long haul. Remember the words of Jeff Macke “Getting in a losing position doesn’t kill you, staying in a losing position kills you” and accept your pain and use it for your long term gain.

Just as a corollary to the above, I wish to point out the following:
On Twitter, in the various trading and investing forums, and even on my beloved StockTwits, there are the Geniuses, the Uber Guru’s, who never seem to have a losing trade. One particular individual even talks of thousands of consecutive winning trades. Well if you buy into my above thesis, two things must logically follow, 1 is they are unique in the annals of history in their towering intellect and with powers and abilities far beyond those of mortal men, or 2 they are lying, maybe for pure egoistic reasons, or they are trying to sell you something. The aforementioned guy will even sell you cheesy tee shirts, his low rent fiction, or country music CD’s on his website.

Aiki14

No cats were harmed in the making of this blog


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