Take The Loss

We can also talk about Daniel Kahneman, Amos Tversky and even Aaron Beck.

But I never knew any of those guys personally.

The list above are some of the names that have helped me in real life over the years and I can pick up the phone and call them whenever I want.

That's really cool for nerds like me.

I highly encourage you to go read all the books and blogs written by that entire list.

I'll give it to you again: Annie Duke, Brett Steenbarger, Denise Shull, Daniel Crosby, Andrew Menaker and Phil Pearlman:

You want to be a better investor?

You want to make more money trading?

Go learn as much as possible about what these people are good at. Trust me.

I'm no expert, but I do think about this stuff a lot.

I've failed miserably many times throughout my career (and life), and that is probably why I've succeeded so much.

Being a baseball player my whole life certainly helped with that. Think about it like this: In Baseball you can fail 70% of the time and if you do that over a career you get inducted into the Hall of Fame.

That's powerful.

You better to learn to fail and you better learn quick, otherwise you're going to make a shitty ball player and an even worse trader or investor.

Today I was thinking a lot about failing and taking losses, and how good it feels to just say "Good Riddance", and no longer have to worry about the loser causing me angst.

It's such a relieving feeling, like finally getting to pee after drinking way too many beers.

It feels nice.

So I asked my friends, which one is the better feeling?

Taking a nice profit on a stock and then bitching about how I didn't own enough?

Or taking a manageable loss and no longer having to worry about that loser in the portfolio?

I'm thinking it's the latter.

Here's what Pearlman said,

"My take - it's the latter & the relief you experience from the anxiety (or aversion) of holding the loser. To a lesser degree, there is also satisfaction from taking a gain, but this is more ego stroking than anxiety relief in many but not all cases."

Making money is great. And that's the goal in investing after all.

But I'm asking specifically about the feeling. We're talking about being human here and how we think.

Which one makes you feel better? Not owning enough stock when you make a profit? (Because if you do profit, you could have always owned more and made more money)

Or is it getting rid of the loser that's ruining your day/week/month or worse in some people's cases - years or more...?

For me I think it's the latter.

Maybe I'll mature as I grow older. I've only been doing this for 20 years. I still have a long way to go as I (hopefully) grow to become a wiser investor.

I turn 41 in a couple of weeks.

So you're stuck with me for many more decades to come!

Ha

But seriously, let me know how you feel about this. I've been thinking about it a lot.

I consider you the smart money. Dumb people read other stuff.

Over the years you've proven this, with all your ideas, experience and feedback. I respect you for that.

So kudos.

But selfishly, I do want to here from you.

Like I said, you're the smart money. I've been learning from you guys every day for over a decade.

So thank you for that.

Let's keep it rolling.

Ping me and let me know your thoughts!

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