INDIVIDUALITY - THE KEY TO SUCCESS
“We suffocate among people who think they are absolutely right, whether in their machines
or in their ideas.” --Albert Camus - Neither Victims or Executioners
As we have seen, it is quite natural for humans to group together due to their sociable nature.
In addition, the societies that man has created have reinforced this further. Today we are
faced with a society that is becoming even more complex due to the technological advances
of man. This extremely complex and specialised society has actually meant that we all tend
to specialise in particular areas and delegate to someone else a task we feel we do not have
sufficient time or expertise to concentrate on. For instance, if a computer breaks down we
may well consult a specialist who we feel has the knowledge and experience to solve the
problem. Similarly, those with money to invest give it blindly to the so-called experts of the
financial world to invest for them, or follow some learned guru in the media. With the fixing
of a computer we have a logical problem with a logical solution, and there is a scientific
formula to get the desired result. With finance, however, we have an area where logic by
itself does not work, and there is no set formula that guarantees success, so just how good are
the so-called experts, and could you do better?
“An economist is an expert who will know tomorrow why the things he predicted yesterday,
didn’t happen today.” --Dr. Lawrence J. Peter
If you study the statistics, you will find that the advice of the so-called experts is, on the
whole, very poor. Financial experts who are in the media nearly always make their most
wildly inaccurate predictions at, or close to, important market tops and bottoms. Remember
October 1987 - how many were saying we were entering a “golden era” for shares, and how
many stockbrokers’ fund managers lost in the crash? If you look, you will find the bulk lost.
As we have stated, all the fundamental data, news, computer technology and advanced
communications, are not by themselves a recipe for success. Following the crowds is a
psychological, not an intellectual, failing. Despite the gloss and propaganda of the experts,
on the whole their long-term track records are poor.
The Wall Street Journal did an interesting competition in which several market experts were
to use their skill and judgement to pick various shares. They then pitted them against “the
monkey”, which effectively was a random throw of a dart at a board. After a period of
several months, you won’t be surprised to know the monkey was marginally ahead! There is
no need to feel intimidated by the experts, you can compete against them on equal terms and
you will find you beat them with regular consistency.
“It follows the more specialised society becomes, the less attention it pays to the discoveries
of the mind which are intuitively beamed towards the brain, there to be received only if the
switches are ‘on’. Specialisation tends to shut off the wide band tuning and thus, to preclude
further discovery of the all-powerful generalised principles”. --B. Fuller - Synergetics
Independent thought is essential to success. Thinking for oneself is one of the highest
privileges granted to mankind, but it is one that we use less and less in modern society. The
age of specialisation means that we concentrate our thoughts in narrow areas we feel
comfortable with. This has led to many investors feeling at a disadvantage against the socalled
experts and their vast amount of data and sophisticated technology. After reading this
you should feel comfortable that you can compete as an equal.
“Whatever you do for the next five minutes, don’t think of the colour blue.” --Neurolinguistic Programming Paradox
The first thing a trader must do before entering the market is to understand our own nature.
While we can never remove ourselves from the human race, we can deviate from the norm in
certain areas by having a clear understanding of our strengths and weaknesses. Whilst we are
all emotional beings, subject to the impulses of the crowd, we are however capable of
individual thought and this will allow us to adapt and change if we wish to do so. The fact is,
what can be learned can be unlearned. For instance, the investor who follows the crowd does
so through society conditioning and intellectual laziness. Once you understand the logic of
not doing so, you can change your behaviour. Similarly, you know that you are an emotional
being due to your race. However, again you can learn to control your emotions and minimise
their impact by using a disciplined trading plan.
Tools To Trade Turning Points
“Buy when everyone else is selling and hold until everyone else is buying. This is more than
a catchy slogan . It is the very essence of successful investment” --John Paul Getty - How to be Rich
You should see from the above that if we can spot an emotional crowd and position ourselves
in the opposite direction we can make great profits. Its not of course enough just to
understand this, we need specific tools that can help us identify and act on these moves.
There are number of tools available and we have outlined them in our “Shooting Star Trading
Method.”
This method will help you not only identify an emotional crowd but will also help you act
upon these situations for big profits.
Fundamentals 4
