Advanced investment philosophy by Professor Adam.
4. Fighting the ego: The role of rules and strategies.
Our ego wants to be able to say: "I predicted that this transaction would be profitable because I am so clever." We want to be able to triumph and feel proud of our intelligence. We want to tell our friends, colleagues, and family members how good we are. Meanwhile, a professional quietly tells themselves: "I know nothing. It's the rules I've created that told me what to do. It's the process that made me money, not me."
We become victims of our ego because we forget that our minds, which are 400,000 years old and remnants of cavemen, have always been and will always be responsible for our choices. The rules, systems, and principles, most of which are so eager to be quickly rejected, are exactly the things you must accept with open eyes and open arms to prevent the self-destruction that is built into us.
A great example of this is our tendency for revenge or obsession over past actions when we give new students access to our insights. You will hear them say: "I am a little in the negative now. Should I wait until I get back to zero?" The students overlook the basic truth that their entry price is completely useless and irrelevant information for future decisions.
In chess, only the current position and the time on the clock matter. Why should trading be any different? You can't go back in time. No one cares if your entry price was $100 or $100,000. Only your current position matters. The rest is emotional baggage. What do you need the entry price for? It's nothing more than a useless emotional connection to the past.
There is only one important question: what is the next best move from where you are?
After all, people did not evolve to sit in front of a screen and make complex decisions about expected value or statistical calculations of probability. What we were destined for is to fight kangaroos, jump on crocodile backs, and avoid flying spears. That's why emotional detachment from our impulses, which command us to follow well-researched rules, is so powerful for us as investors. The sooner you develop your own rules and strategies using the materials, the better.
4. Fighting the ego: The role of rules and strategies.
Our ego wants to be able to say: "I predicted that this transaction would be profitable because I am so clever." We want to be able to triumph and feel proud of our intelligence. We want to tell our friends, colleagues, and family members how good we are. Meanwhile, a professional quietly tells themselves: "I know nothing. It's the rules I've created that told me what to do. It's the process that made me money, not me."
We become victims of our ego because we forget that our minds, which are 400,000 years old and remnants of cavemen, have always been and will always be responsible for our choices. The rules, systems, and principles, most of which are so eager to be quickly rejected, are exactly the things you must accept with open eyes and open arms to prevent the self-destruction that is built into us.
A great example of this is our tendency for revenge or obsession over past actions when we give new students access to our insights. You will hear them say: "I am a little in the negative now. Should I wait until I get back to zero?" The students overlook the basic truth that their entry price is completely useless and irrelevant information for future decisions.
In chess, only the current position and the time on the clock matter. Why should trading be any different? You can't go back in time. No one cares if your entry price was $100 or $100,000. Only your current position matters. The rest is emotional baggage. What do you need the entry price for? It's nothing more than a useless emotional connection to the past.
There is only one important question: what is the next best move from where you are?
After all, people did not evolve to sit in front of a screen and make complex decisions about expected value or statistical calculations of probability. What we were destined for is to fight kangaroos, jump on crocodile backs, and avoid flying spears. That's why emotional detachment from our impulses, which command us to follow well-researched rules, is so powerful for us as investors. The sooner you develop your own rules and strategies using the materials, the better.
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