I'm currently reading Devil in the White City. It is a book about the World's Fair hosted by Chicago. I'm in the early stages of the book. Against the backdrop of the preliminary planning (circa 1890) for the WF, there is stock market against. Barings Bank (oh yes THAT one) is having some issues requiring some intervention--so the financial markets are very jittery.
It was so odd to read those couple of pages knowing that at the time of my going upstairs the Nikkei was already down some 400 points. I almost expected that the Nikkei would perform a miraculous U-turn, as it did last week. That was not to be.
Stay Conscious: One of the graphic designers at an ad agency that I worked for had a bumper sticker attached to her computer that said, "Stay Conscious." I always found that phrase funny--funny in a wry way that we think about how much of our life that we move through as an automaton. So the phrase, 'Stay Conscious,' is a useful one. While I cannot say that I've handled the downturn with any great skill other than having a goodly amount of cash on hand, I can say that it is a downturn in which I've practiced the "Stay Conscious" mantra.
I wasn't conscious of the other downturns, as my life was filled with work and family responsibilities. I believed that my investments in 'safe' mutual funds would take care of themselves. The joy of the ever-increasing-balances was quickly eroded. Mutual funds are only programmed to invest in the sectors that you chose, not to avoid losses. I wished that I had understood that.
Early to the Party: I was early to this downturn party and had to lick more than a few wounds. So I'm rationalizing that my 'gains' lost from not participating smartly in the downturn would have only offset the losses from my being too anticipatory. At the very least, I'm not fully invested but I will mourn forever giving up my SMN position.
Confidence Game: If only we were taught at an earlier age how much of life is a confidence game, life would be so much easier. We are psychological beings; our confidence, or lack of, colors everything that we do. Sometimes the coloring goes way outside the lines--like a toddler exuberantly coloring with a fistful of Crayon's: mixed up colors outside of rational boundaries. Overconfidence. Overconfidence is generally born of lack of discipline coupled and nonexistent rational boundaries. Our financial markets feel so much like that. When we are confident of the economy, our leaders and our personal situations we feel so much more at ease with our money in the markets. The past excesses in the market (just as in our lives) always catch up!.
Of equal danger is our failing to color richly within rational boundaries. Thoughtlessly chosen colors applied with disinterest is no less dangerous than chaotic coloring. The result is squandered opportunity and lack of engagement with our lives.
Most important of all, though, is identifying the boundaries. But, as I write, I think that I'll contradict that opening line. As I write, I believe that if we color our lives with disciplined exuberance in rich, well chosen colors, our boundaries will expand as our mastery evolves.
Perhaps I've written a clumsy metaphor, but I believe that it applies to how we live and how we invest. In some of my investment decisions in the past, I've been the exuberant toddler--I was too far outside the lines of rational investment behavior. Now, I'm purposely choosing my colors, and I'm being very methodical about how I'm applying them! I'm settling for the base hits rather than the home runs--but you'll still see me lament those home runs--for the singular purpose of building personal mastery by frequent successes. In insurance underwriting frequency often trumps magnitude. So if you have frequent low cost accidents or events (tickets) they often cost you more than the large, infrequent event. It's particularly true of workers' compensation claims.
In my life, I'm using my Resolutions that I shared with you to color in those various areas! Today is 'body' day--diet and exercise will be adhered to rigorously. I give myself permission to NOT adhere for 3 of the 7 days. I squandered those this weekend--I managed to pack in 3 days of non-adherence into 2. How's that for efficiency?!!!
It was so odd to read those couple of pages knowing that at the time of my going upstairs the Nikkei was already down some 400 points. I almost expected that the Nikkei would perform a miraculous U-turn, as it did last week. That was not to be.
Stay Conscious: One of the graphic designers at an ad agency that I worked for had a bumper sticker attached to her computer that said, "Stay Conscious." I always found that phrase funny--funny in a wry way that we think about how much of our life that we move through as an automaton. So the phrase, 'Stay Conscious,' is a useful one. While I cannot say that I've handled the downturn with any great skill other than having a goodly amount of cash on hand, I can say that it is a downturn in which I've practiced the "Stay Conscious" mantra.
I wasn't conscious of the other downturns, as my life was filled with work and family responsibilities. I believed that my investments in 'safe' mutual funds would take care of themselves. The joy of the ever-increasing-balances was quickly eroded. Mutual funds are only programmed to invest in the sectors that you chose, not to avoid losses. I wished that I had understood that.
Early to the Party: I was early to this downturn party and had to lick more than a few wounds. So I'm rationalizing that my 'gains' lost from not participating smartly in the downturn would have only offset the losses from my being too anticipatory. At the very least, I'm not fully invested but I will mourn forever giving up my SMN position.
Confidence Game: If only we were taught at an earlier age how much of life is a confidence game, life would be so much easier. We are psychological beings; our confidence, or lack of, colors everything that we do. Sometimes the coloring goes way outside the lines--like a toddler exuberantly coloring with a fistful of Crayon's: mixed up colors outside of rational boundaries. Overconfidence. Overconfidence is generally born of lack of discipline coupled and nonexistent rational boundaries. Our financial markets feel so much like that. When we are confident of the economy, our leaders and our personal situations we feel so much more at ease with our money in the markets. The past excesses in the market (just as in our lives) always catch up!.
Of equal danger is our failing to color richly within rational boundaries. Thoughtlessly chosen colors applied with disinterest is no less dangerous than chaotic coloring. The result is squandered opportunity and lack of engagement with our lives.
Most important of all, though, is identifying the boundaries. But, as I write, I think that I'll contradict that opening line. As I write, I believe that if we color our lives with disciplined exuberance in rich, well chosen colors, our boundaries will expand as our mastery evolves.
Perhaps I've written a clumsy metaphor, but I believe that it applies to how we live and how we invest. In some of my investment decisions in the past, I've been the exuberant toddler--I was too far outside the lines of rational investment behavior. Now, I'm purposely choosing my colors, and I'm being very methodical about how I'm applying them! I'm settling for the base hits rather than the home runs--but you'll still see me lament those home runs--for the singular purpose of building personal mastery by frequent successes. In insurance underwriting frequency often trumps magnitude. So if you have frequent low cost accidents or events (tickets) they often cost you more than the large, infrequent event. It's particularly true of workers' compensation claims.
In my life, I'm using my Resolutions that I shared with you to color in those various areas! Today is 'body' day--diet and exercise will be adhered to rigorously. I give myself permission to NOT adhere for 3 of the 7 days. I squandered those this weekend--I managed to pack in 3 days of non-adherence into 2. How's that for efficiency?!!!
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