A thought on commonalities between markets and relationships

Warning: I have no practical experience whatsoever with the markets, I have been through lots of struggles in relationships.

I’ve been thinking lately about a book I’ve just finished reading, the What I learned losing a Million Dollars written by Jim Paul. It is based on his personal experience of losing over $1,6 Million. I liked it a lot by the way. It is a complete breath of fresh air compared to make-billion-in-your-garage-over-a-weekend bullshit books. Back to the story, what happened?

Jim Paul describes several mistakes people commit in their mental processes while trading. These mistakes lead to emotionalism, which means making decisions under the influence of emotions, rather than common sense. Personalizing is one of the mistakes laid out.

Success can be built upon repeated failures when the failures aren’t taken personally, likewise failure can be built upon repeated successes when they are taken personally.

– Jim Paul

There are so many factors going on at the same time that it is hard to recognize the impact of randomness – such as being in the right place in a right time – thus making it easier to attribute the result to abilities of one’s self. One can get incredibly cocky at a very short period of time, or depressed by the course of events.If you are trading tens of thousands of dollars with remarkable success, you may get a sense of having Midas touch – as it happened to Jim Paul. When market turns down and you start losing it, you cannot pull the plug, because your overly confident mind cannot accept the defeat. Or, on the other hand, if you get into the loop of losing money right from the beginning, then you may see yourself as a complete loser. “Shit, everyone around me is making heaps of dough, riding flashy cars and what do I have? A fucking mortgage to pay!”

It got me thinking, can you personalize a relationship in the same manner as a trading position? Can you see behaviour of a girl as a personal reflection of who you are? If I become overly emotionally invested, then her highs will be my highs and her lows will be my lows – and both are, as in the markets, very dangerous. The thing is that her state of mind may be partly independent of me. So I guess I’ll retain my position in the midst of her storms and focus on my inner validation. Am I living according to my moral ethics? Can I look at the face in the mirror without flinching? Am I leaving a positive impact in the world? Am I doing my best every day?

Many a time there is not much that we can do, except for being congruent with our core and offering a warm hug and support. The key outcome of this post is to keep in mind the randomness of events and the small chance of exerting our will upon them.

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About Petr Klíma