The Tao Can Help You When Contemplating The Dow—Part 2
1/ In verse 15 of the “Tao Te Ching,” Lao Tzu looks at “ancient times” and the masters of those days being “minutely subtle, mysteriously comprehending, and too profound to be known.” He goes on to say:
1/ In verse 15 of the “Tao Te Ching,” Lao Tzu looks at “ancient times” and the masters of those days being “minutely subtle, mysteriously comprehending, and too profound to be known.” He goes on to say:
2/ “They were muddy like unreflecting water. The mud will settle, but it is hard to wait for it. If you can, then you can act. If you follow the Tao without pretension you will never burn yourself out.”
Translation: a wise person is careful, cautious and patient.
Translation: a wise person is careful, cautious and patient.
3/ In the market, many investors feel the need to *react* to everything that is happening. They equate action with effectiveness. Lao Tzu cautions us against this: when things are murky and muddy, you can’t see things clearly. You’re not seeing the true picture and might
4/ be seeing the opposite of what the true picture is.
Acting when things are not clear increases the chance that you will be wrong. Reacting to things almost always has a strong emotional component which further removes clarity, to the point where you make choices in the heat
Acting when things are not clear increases the chance that you will be wrong. Reacting to things almost always has a strong emotional component which further removes clarity, to the point where you make choices in the heat
5/ of the moment that you regret deeply once the “mud has settled” and the clearer picture emerges.
It’s often better to maintain a “we’ll see” disposition that allows the intense pressure of the moment to dissipate and your emotions to settle. We often think back to a
It’s often better to maintain a “we’ll see” disposition that allows the intense pressure of the moment to dissipate and your emotions to settle. We often think back to a
6/ time when we acted rashly and emotionally only to wonder, “what was I thinking?” And the answer is: You weren’t; you were allowing your emotions to dictate your actions. It’s only in retrospect that you can see clearly, devoid of the stirred-up emotions.
7/ I have a friend who is not a quant who nevertheless has a cure for this: whenever he finds himself overwhelmed by the news of the moment feeding a strong emotional desire to “do something,” he immediately removes himself from the situation and goes for a walk or works out.
8/ When he comes back to his workstation, his mind is cleared, and he is far more able to judge the situation dispassionately.
Being careful, cautious and patient sounds sensible, yet it is often almost impossible to do in the heat of the moment. Look at some of your previous
Being careful, cautious and patient sounds sensible, yet it is often almost impossible to do in the heat of the moment. Look at some of your previous
9/ investment mistakes and you might find now that it is easy to see what went wrong. That’s because your emotions are no longer involved, and you can see things with greater clarity.
Try it, it works.
Try it, it works.
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