How do we as investors learn to keep ahead of all the forces working against us when investing? The only way I know of is to empower ourselves with knowledge. This wisdom will assist us in our emotional, mental, verbal, and financial defense. Educating one's self leads to stimulating a mental attribute called common sense. It my dealings, as with most people, this is an attitude that can be developed with proper study and learning trading/investment techniques plus knowing some of the players on the internet.
As difficult as it may be we all have to teach ourselves how to recognize and avoid potentially dangerous situations in the market. Not only being careful of the mistruths from the companies but shorters with their naysayers (doubt touters), day traders with their quest to get a following of sheep with great hindsight and wonderful verbal skills, and con artists from real world to internet using effective skills in pitting Greed against fear.. This is why education is the only way to effectively deal with all the greed/fear driven logics.
An emotionless defensive mind set can be developed through proper mental conditioning through constant study while learning from previous mistakes. If someone is going to trade in the market it is a necessity to have the proper mental abilities to back it up. In today's society, where sooner or later someone WILL BE A VICTIM they will immediately want to blame whomever they can for this terrible injustice. Surely I could not have fallen for this so whom do I blame. Who is to blame in reality are your closest enemies, good Ole Mr. Greed and his brother Mr. Fear and their affiliates which address those two.
One of the more frustrating aspects of investing is dealing with your friends or acquaintences when they show a loss in an investment resulting in them becoming angry or defiant. One the equity starts falling most everyone feels powerless, emotionally drained, or simply furious. However, investors must learn that emotional negatives, aggressive behavior and absurd comparisons is not productive. It is harmful to investors and companies that are actually trying to do what they have to do to get their business off the ground floor. How can you learn Self-Control and use Common Snese when you are upset especially with a negative looking you in the face everytime you pull up your portfolio.
Set yourself a few goals of Teaching Self-Control and learn to follow those rules which will assist you in calming down during these emotionally intense times. Take the responsibility upon yourself before you turn an equity loss and into a real financial loss.
There are two key parts to Teaching Self-Control:
1. Calming yourself down so you can think clearly, rationally and effectively.
2. Begin to follow-up to see what sort of shape you are in and if it is a temporary/permanent set back.
This helps people to evaluation the seriousness of the situation. Sometimes averaging down is not a good idea and sometimes it is but only a clear calm mind can make that decision.
Suggested Guidelines:
1. One step back and look at the problem.
2. Try to identify the problem or problems and clarify them to yourself realisticaly
3. Try to understand how you over looked this situation.
4. Focusing on the problem with a clear head.
5. Was discovering the problem within your control.
6. Write it down or make a mental note of the problem so you can focus on the problem Facts.
7. Make the analysis as clear as possible based on facts.
8. Try not to use vague or judgmental opinions ... stay focused
9. Follow up on the opinions you form and see if things are as bad as they seem but remain calm.
10. If you get upset then back off and come back after calming down this can be very effective.
11. Walk away as often as necessary to disspell any stimulation of greed/fear..
12. As you eliminate problems with facts move calmly on to the next problem but stay focused.
13. Listen to yourself to see if you are paying attention to what you say.
Once this is complished what do you do.
1. See if you can describe exactly what you could do differently the next time.
2. Try to see why you bought and see if that is an option in the future or not.
3. Remember if you sell you settle your claims and are not entitled to any shareholder compensation
4. Focus an steer away from frustration or anger.
5. It is easy to use "Instead of..." or "if" because that is hindsight which unfocuses from the facts.
6. Practice on staying focused
7. Remind yourself the consequences you knew ahead of your invesment decision. (common mistake)
8. Remember that consequences help change behavior; use them!
9. Emphasize that you should consistently use a negative consequence.
10. Teaching Self-Control you have to learn not to blow up.
Some people have a lot of stamina when they are upset, so it could take a while before the problem is resolved. The wisest investors are those who realize that learning self-control is an ongoing process.. Teaching self-control is a tough job!
Problems to steer away from:
1. Whiners accusers have a motive
2. Examine the pluses and minuses of some traditional investment strategies
3. Try to stay with effective strategies
4. Whiners/accusors whine/accuse because it works for them plus they want others to share their misery.
5. Whining/accusors are most effectively used by investors to distract from the facts and stimulate that emotion in others
6. Ignore the whiners/accusors and stick to the facts
Facts are what you base investing on and very little speculation. Always use common sense when investing. If something makes no sense or you know is wrong don;t whine check it out. It is your investment.
GB
PS I do not know what the future holds ... all I know is what is in the news releases. I have not talked to Mark all week and when he is ready he will let me know. He has a lot to do to get this company cleaned up. Filings to make .. 8Ks, 10K, 10Q, the CUSIP for the split, the legal matters against Dan and his affiliates. So it is not going to hapen over night but he has a lot to do. BLAME me that is fine I am consistent and I shall remain that way. |
