Some are controllable and we will be able to control them within our means, while the others are uncontrollable.
I will be able to control my emotions to prevent myself from over reacting.
I will be able to control my decisions and body to do something.
BUT..
I'm unable to control the speed of another car and the chances of getting into an accident if the driver is reckless. But, I'll be able to stay vigilant and alert to the road conditions to prevent the odds of getting into one.
I'm unable to control another person's reaction when this person is filled with emotions. But what I can do is to console this person and possibly change the emotions they have in them, which might prevent the person from doing something silly.
I'm unable to control other's decision and body if they're going to do something. But, similarly, I'm able to provide help by all means to change the fact.
It can applies to Mr Market too!
Importantly, we have to first understand ourselves and define the controllable and uncontrollable in each situation.
I might be speaking a little too early today especially when it come to Mr Market's term as I'm relatively new.
But defining the controllable, I'll see things such as emotion, decision, portfolio sizing, risk appetite etc.
How about the uncontrollable? Market movement, the rationality of Mr Market, Volatility, price movements, upcoming company's performance etc.
Prior to making any decisions, it's important for us to do some homework to get a clearer picture, else it makes no differences from gambling or speculation.
I could use several tools along to help me with that. Upon seeing a clearer picture, I will then need to control my emotions and not act irrationaly.
As humans, if we are always thinking about the uncontrollable factors affecting us. We will soon be affected by things that are controllable.
If I'm constantly affected by the price of a particular counter and losing sleep over it, it's likely that I'm overly-invested.
And having that said, things such as my emotions and decision will make it's way to the door.
This is when we're going to be affected by things that are controllable.
It's important to make plans and be prepared for contigency! It's about the probability and not certainty.
How good would it be if we've a controller all to ourself?
Interesting post. I do think we all have a inner controller that God has given to mankind- the power to create the things we want in life. Yet, this power is equally destructive if one harbours it to ill intention.
ReplyDeleteThere is not a single thing that is created in the world without man's imagination. Be it a plane, a world class city or even the market movement.
The market movement - be it up, down or sideway if we dwell deeper is nothing but a reflection of the collective emotions of the buyers and sellers. Like a seesaw, the heavier side wins until such time the other party takes over or they reach an equilibrium.
If Trump's trade war is sending chills to more investors, then the tendency to sell is higher than buy. Yet, there would be always a group of contranians awaiting to buy, believing in their own principles and theories why it is worthwhile.
Examine your inner thoughts each day and practice this power , far more effective than any modern strategies out there, yet there are few who believe the simplicity of this ancient gem works time and time again.
Hi Mr Chua,
DeleteIt was awhile since I last see you here :)
Thank you once again for dropping by and the wise words!
I agree that it is very important for one to understand themselves. It is a relatively simple concept but hard to practice. By understanding oneself, it allows one to head to the right or intended direction, regardless of life aspect or investment wise.
Everyone has a different situation and profile. Hence, it is always good to examine yourself as an example as compared to living in the shadow of another person :)
Looking forward to see more wise insights from you soon :)
Buy, hold or sell is what we can control. How to implement them well is what we need to learn well over our lifetime in the market will have significant impact on our investment outcome
ReplyDeleteHi Uncle CW,
DeleteI am too early to say all this, but with such words from you, I'm guessing that my thinking might not stray too far away from what the desired outcome is supposed to be.
Practice makes perfect! And with fingers crossed, I hope I'm practicing well or at the very least, sufficient to build up the knowledge and learning how to implement them better.