This entry takes a few turns, and maybe it ends with something you don’t expect as you read the beginning. I look forward to your feedback.
These are my 5 pillars of investing that have governed my habits over time. They took years to develop and became solidified between 2020-2022 when I really took a serious look at how I viewed investing and trading. I didn’t realize until recently that these words could be arranged into an order that allows for a cool anagram like this, but here we are.
Patience
Education
Action
Conviction
Humility
PATIENCE – For those just starting out with investing, or trading, the expectations can be much different than the reality. I’ve been told things like “I get so nervous, as soon as I am up like $25 I just want to sell so I don’t lose it.” This was my very first pillar of strength that I established because I also noticed myself that I could become impatient when things were moving against what I thought should be happening. I would become upset with that, and react inappropriately. Patience also applies in waiting for opportunities to come along, waiting for entry points, waiting until I am ready and prepared to trade certain types of trades. ♫ All we need is just a little patience…. ooh yeah. I bet you can identify with that if you’re generation X.
EDUCATION – I realized I need to keep studying and learning more. I was my own worst enemy for a while, and realized I was a product of the Dunning Kruger effect. The Dunning-Kruger effect is a cognitive bias where people with limited knowledge or competence in a specific area tend to overestimate their abilities. That was me, and I still think it can be me so I want to keep on learning and reading about topics that will improve my ability.
ACTION – Interesting enough, ACTION comes from the last 6 letters of Education. Originally my “pillar” was named “Act Decisively” which I later reduced to the single word “ACTION” for ease of reference. This means when the time comes for action, wherever it may be, we must act decisively and do what is needed. This does not mean taking excessive actions, nor does is mean doing something just to be seen as taking action. Acting Decisively can also mean choosing to wait, let something mature. It can mean accepting a loss and adjusting course. It can mean taking a win while it’s still possible, and not being greedy. Yes, ACTION is a very important component of the peach 🍑
CONVICTION – Originally this pillar was my 3rd point that I had written on my dry-erase calendar that was mounted in front of my desk. I had written “no regrets” which aimed to communicate to myself that I should not look back on trades, and have the attitude of regret. If it was a mistake, admit it, learn from it, and count it as a lesson that I just paid a price for. Education is not free, and neither are our mistakes in trading. The price paid for learning is part of the education process, and if viewed like this, can be constructive for future habits.
HUMILITY – Staying humble is important especially when hitting all time highs, or posting up big wins. I initially wrote this as “Don’t get Cocky!” A friend with some experience in behavioral therapy told me that I should aim to word that in the positive sense rather than the “don’t do that” type of mentality. The subconscious can sometimes key in on only the words, and our brain then wires our underlying attitude in an alternate direction we want to go. So almost immediately, this pillar, which was the last of the 5 I came up with in 2020 got renamed to “Be Humble.”
I had all 5 of those pillars written in their initial forms at the top a big white board style calendar in my home office. I used different colors to write the words, and would look up at them occasionally, sometimes frequently to pull my mindset back into line.
“Be Patient” was written in a dark blue dry erase marker at the top right corner of the board. Directly underneath that, in a bold green marker, I had “Act Decisively” which is now Action. Below that I had written in a red marker, “No Regrets.” Those three would be the initial pillars of my mindset, the things that I was focusing on while forming my Education. In short time, I realized I had to add that pillar of education, and so I wrote in purple, “Never Stop Learning.”
The last entry on the wall where I would plan my thoughts almost every single day was “Don’t get cocky!” It was written in black, mostly because I ran out of other colors, and orange, pink, and lime green didn’t really drive home the point.
I look back now, and remember looking up at those words with fondness as I studied hard and learned what I could. It also awakens in me some emotions that make my throat hurt, and my eyes well up with something us guys sometimes have a hard time letting on is happening.
EVERYTHING CHANGED FOR THE WORSE
Right around this time a life changing event took place that changed everything for my outlook on life and how I handled everything. The days that followed resulted in the emergence of something in me that was very destructive, and at the same time revolutionary. I developed a hatred for money. I developed a hatred for almost everything including myself sometimes. My mind carried my soul to a very dark place that I thought I would never come out of.
In the three months that followed November 13th, 2021, I proceeded to purposely wipe out almost everything. I suppose the bearish tilt to 2022 didn’t help much, but I didn’t care. I just wanted it all to go away and f*ck everything.
In February of 2022, I woke up one day and realized this pattern of self destruction I had initiated was not the right path. I decided to drain every last cent from the trading account after having watched it piss away more than 50% of it’s value, and transferred it to save in pesos, which ironically for the period was probably not a bad idea as the
USD dollar devalued quite a bit in the years from 2022-2024 anyway.
It took time to sort all my personal issues out, and I went through a very dark forest, down some deep wells, and through some pathways I never want to see again in my life. While that was happening, I knew I could not be doing any sort of trading. So I did none. Absolutely none. The destruction I had done with the time bombs and Molotov cocktails that I had thrown at everything close to me had to stop. I ripped my big calendar with all my tenets and pillars of attitude off the wall and cut if up with scissors and threw it into the garbage. I stopped any and all activity. I literally hated it, and didn’t want to think about it.
I didn’t do any trading from February 2022 onward. Instead, I just let it sit, waiting for something to do. We eventually used it to invest in something other than funds and stocks.
I just couldn’t think about trading. I didn’t have the mindset to be able to do it, no matter what. My mind was somewhere else, and it took a long time to get it back on track. Until I could, I just felt that trying to trade would be toxic to my financial health, so I just worked, and left things alone.
After a year long break. I was ready to start again. The sun came up on my mindset, and I was ready to continue the education, and restart activity once again. This time around, I had some new skills to back me up. The issues that I had vanquished gave me the ability to increase my patience and conviction with my decisions more than anything. The other three tenets of my philosophy remain indispensable as well, but I think that year off made me realize what is important in life and allowed me to come back to this with a new attitude.
I could explore that period one day, maybe write about it and explain the things I learned. It was so much that I think it could fill volumes, but it wasn’t about investments, it wasn’t about trading, so perhaps it doesn’t belong here. Maybe it does. I don’t know.
Life’s a peach, and I will leave it at that for today.
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