Jawad Mian Profile picture
28 Jan, 10 tweets, 1 min read
1) If you're not reflecting on risk management after this week's events then what are you even doing?

Here's a thread on some basic thoughts on how to better manage risk and mistakes going forward:
2) First of all, given where we are in the investment cycle, focus more intently on the downside than the upside.
3) Slow down if you see a loss of money on any position. That should put you on high alert.

Keep looking for disconfirming evidence.
4) Rely more on technical analysis for risk control and price trend discipline.

It will help to reduce the influence of emotions and ego on your trading.
5) A change in the technical picture should give you second thoughts and force you to re-evaluate your investment thesis.
6) Develop alternative scenarios and learn to be open-minded and flexible when challenged by the market.
7) Don't let losses disturb your emotional equilibrium.

If a losing position is making you uncomfortable, just get out.
8) The natural thing to do when you are not trading well is to cut the extent of risk taking.
9) This will allow a more dispassionate analysis of the situation, and you can then put risk back on with a refreshed palate for risk assumption.
10) As Buddha says, “What you are is what you have been. What you’ll be is what you do now.”

Good luck.

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More from @jsmian

2 Jan
"What important truth do very few people agree with you on?"

My heretical answer to Peter Thiel's favorite interview question. 🔥
1) If you want to be successful, surrender.
2) Before you ask me what I mean by surrender, ask yourself what it means to be successful.
Read 8 tweets
27 Dec 20
1) This year has been difficult for many investors, whether you are a novice or an experienced risk taker.

It would be useful to revisit today's money masters and see how they dealt with gut-wrenching loss.

It always helps renew my ambition. THREAD 👇
2) Paul Tudor Jones lost $10,000 when he was 22, and when he was 25 he lost about $50,000, which was all he had to his name.
3) In 1979, PTJ's fourth year in the business, he lost over 60% of the equity in his clients’ accounts on a single cotton trade that went horribly wrong.

“I am not cut out for this business," he said. "I don’t think I can hack it much longer.”
Read 18 tweets
24 Dec 20
1) Shortly after I graduated from university, I landed a job as a bank teller in Toronto.

It was, surprisingly enough, one of the best things that happened to me.
2) I was shy growing up. I was always the quiet one among friends.

But as a bank teller I was forced to interact with everyone. This helped me break out of my shell.
3) lt was a small neighbourhood branch with a sociable atmosphere.

The branch manager was Italian, the two personal bankers were Indian and Spanish, the financial advisor was Greek, and my two side-kicks at the till were Irish and Canadian.
Read 15 tweets
18 Dec 20
1) Working correctly, the brain represents highest form of “instinctual wisdom,” Alan Watts once said.

But just thinking rigorously or applying more knowledge isn’t what he meant.

2) The brain can only assume its proper function when the mind is in a state of harmony and our consciousness is not trying to control and grasp.
3) When we are completely engaged with what we are doing in the here and now—and instead of calling it work, we realize it is play.
Read 22 tweets
14 Dec 20
1) On a long enough timeline, history repeats.

This much is clear reading Will and Ariel Durant’s The Lessons of History (1968).

As they write, “The past is the present unrolled for understanding.”

Here are some lessons that stuck with me. 👇
2) The first lesson is modesty.

Human history is a brief spot in space. Man is a moment in astronomic time.

Generations of men establish a growing mastery over the earth, but they are destined to become fossils in its soil. Image
3) Life is competition. Even cooperation is a tool and form of competition.

We cooperate in our group—our family, community, party, race, or nation—in order to strengthen our group in its competition with other groups.

The earth will unite only if here is interplanetary war.
Read 21 tweets
5 Dec 20
1) Investing in a bull market is hard enough; hearing it trivialized makes it unnecessarily harder.

In our latest issue, we discuss the far more powerful underlying forces, some outside of common understanding, that are at play.
2) The pandemic is a major displacement that will go down in history as setting new trends and social forces that spark a major bull market and mania.

We are still early in this uptrend.

3) While the world balks at America’s failed response to a coronavirus pandemic, their economic management may yet prove to be superior.

Read 5 tweets

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