I was recently listening to the 100th episode of the Michael Kitces podcast with Joe Duran to learn about how Duran used data analytics to help build and scale a $24 billion wealth management firm. However, it wasn’t the machine learning or the data-driven decision making that stuck with me the most. It was something Duran said at the end of his interview (emphasis mine):
My whole life is driven by one simple quote from Albert Einstein, which is, “the most important decision any person can make is whether they live in a kind or hostile universe”… And if I live in a kind world, I will get what I deserve. So if I do great work, if I make a positive impact, if I give everything I got, I will be fine. No matter what happens.
Technically, this quote is paraphrased and Einstein probably never said it, but Duran brings up an important point about a question you subconsciously answer every day—is the world kind or hostile?
More here – Of Dollars And Data
PS: this is a very good piece and ties in neatly with Ed Seykota’s quote that – Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money. It was my realisation of this many decades ago that lead to this blog having content that at first did not seem fully related to trading. As I have said countless times and will probably continue to say – I only know three things about trading, if it is going up over your time frame buy it, if it is going down over your time frame sell it and dont bet the farm.
This is a profoundly easy mantra to absorb but over the years I have watch people nod sagely as I have told them and then they do exactly the opposite. They do exactly the opposite I think because of two factors. They dont truly want to be successful, they pay lip service to the notion of being successful but subconsciously they dont. Let me give you an example from my past. When I was much younger and competing in martial arts tournaments we had a guy in our club who was a natural fighter – natural fighters are few and far between. Everything he did was perfectly balanced and he had a wonderful rhythm to the way he moved. We were in different weight classes so we only ever spared within the confines of the club so we were only at 60% most of the time but he was a hell of a handful.
When you want to compete at nationals you dont just simply put your hand up and say I want to go you go through a selection process that starts at the club level, then proceeds sometimes to a division level, then state and then nationals. You have to selected in a state team t go nationals. My example fought as a middleweight and so would have to cut weight to make his division which was not much of a problem. He would belt everyone at club level, division and state level but when it came time to compete at nationals he was always turn up overweight. So he would have to try and cut on the day before the tournament began – anyone who has tried to cut a kilo or two off a lean frame will know how taxing it is, as such his performance at nationals was always poor. He subconsciously did not want to be successful at the highest level and go to the world championships. So his subconscious would sabotage him – traders do exactly the same thing.
The second reason traders dont want to successful is that they simply want to be entertained, having fun is more important to them than anything else.