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Objectivity: Maximum success depends on being as objective as possible. It is so easy to get into trouble or miss out on opportunities when ones ego gets tied to ones opinion. Opinions are fine if one has done careful research, knows BOTH the bull and bear case for a market or particular stock inside out. Then one can proceed to make an informed decision as to which side will win out. Once that decision is made it is vital to keep that opinion separate from ego so that when new information comes in one can modify the opinion without any tug of bias, including coming to the opposite conclusion if need be. That whole process is rigorous enough, but when ones opinion becomes entwined with ego, then bias results and one has a tendency to not view the oncoming stream of information objectively. Results suffer. No one is perfect in this regard, but the closer one can come to this ideal, the more one can maximize returns. Biases are a convenient mental shorthand that helps one deal with new information quickly and easily in all parts of life, but especially, when it comes to the market, it's a luxury that comes with a heavy price. This all became painfully apparent at age 40, when I "retired", started making a living at this, and no longer had the regular monthly check to cover my mistakes. IE, Getting more objective and informed became a priority-very fast! Then there is the chapter on overcoming fear and greed.... Mike |
