What Happens Next

Andy's Highlights From Chapter 14 of Psychological Analysis by Adam Sarhan

I was overwhelmed with work for most of the week, so I didn’t get much reading done again. That is disappointing for sure, but I’m trying not to beat myself up about it. I’ll get back to my normal pace soon. Or maybe instead, I’ll just try to enjoy the summer and not stress so much. 🤷‍♂️

Anyway, I’m still working through Mastery by Robert Green and Project Hail Mary by Andy Weir. I’d also love to dig deeper into The 21 Irrefutable Laws of Leadership by John C. Maxwell, but I haven’t had time to process my notes on the first two chapters. 

And then there is Psychological Analysis by Adam Sarhan, which we are almost finished with. I ripped through Chapter 14 this week and enjoyed it just as much as every other one in this outstanding book. Let’s dig in. 

Navigate the Unknown Gracefully

People have a deep-rooted desire for certainty and the market by definition is uncertain. Therein lies one of the most common reasons people fail to beat the market. Successful investors have to rewire their brains to embrace uncertainty and navigate the unknown gracefully. (193)

We all prefer certainty, but there is no such thing in trading. We have to learn to embrace uncertainty if we are going to succeed. 

I thought I was getting better at embracing the uncertainty for a while, but maybe not. It’s been a struggle lately, but at least I’m aware of it and constantly working to improve. 

The Buck Starts and Stops With You

The responsibility to buy, sell, or hold lies on your shoulders, not someone else’s. Now, that does not mean you should blindly dismiss other people’s opinions or remarks - on the contrary, there are a lot of good newsletters, research reports, and credible people who want to share their expertise with you - but the key is to always remember that the buck starts and stops with you. (195)

Taking responsibility for your trades doesn’t mean completely ignoring other people’s input. You have to learn to filter out the noise and make your own decisions. 

This is easier said than done, obviously. Other people’s opinions can affect your thinking in ways that you don’t even realize. But once again, the key is to be aware of the potential for something to impact your decision making. 

The Same Data

At the end of the day, we are all looking at the same data; the big difference is how we use it. Put simply, the smart money makes money from the data while the dumb money consistently loses money and wastes time blaming others and arguing about nonsense. (195)

Because we are all working with the same data set, the only difference between making money and losing money is what we do with that information. 

It would be a lot easier if we choose to believe that someone has access to better, faster, or more accurate information. But that’s not it. 

We must make the hard decision to look in the mirror and admit that the real problem is how we respond to our information. 

Every Tick to the Left

The market is made up of a series of never-ending ticks. Each tick represents a precious moment in time. The last tick, and every tick to the left, is in the past and does not make you money. (196)

The past is in the past. Dwelling on that past will not help you trade profitably in the future. (This doesn’t mean to ignore the past or avoid studying it, but you have to differentiate it from the unknown future.)

How You React to Things

Remember, you can’t control what happens to you in life, but you can control your attitude and how you react to things. I recommend choosing to be happy in every situation you are in. (197)

Ruthlessly eliminate negativity from your life. Force yourself to focus on positive energy. Choose how you react to anything that happens to you, and choose to make that reaction positive. 

I was already working on this idea long before I started reading this book, and I still have a long way to go. We all do. But progress is the key. I’m making small steps forward every single day. 

We’re down to one chapter left, so my plan is to shoot through that and the epilogue this week. If it’s a short epilogue, we can call it after next week, but if it’s a longer one I might stretch this into two more weeks. We’ll see. 

Either way, I hope you all have a fantastic week focusing on everything positive happening in your lives while letting all of the negative energy fall away without a second thought.