Attack the Week (ATW)
November 27, 2023
My Mexican travels are ending today as I am about to board a plane back to UK shores. It’s been a frankly amazing experience. It is funny how your anticipation of a place usually turns out totally different to what you will take away from it. For those culinary lovers amongst you planning a trip to this amazing country, let me know, and I will give you a few pointers. I’m certainly a few pounds over as I’m travelling home.
Expectations and ultimate reality usually clash. At least, that’s how I experienced most of my life. I just can’t stop imagining and anticipating things. I guess it’s one of the things we, as investors, are hard-wired to do day in and day out. Learning how to keep an open mind is not only an important ingredient for everyday living but also extremely useful when dealing with investment and trade opportunities. As I am committing more articles on the subject of resilience, here is a quick little trick that will hopefully work for you.
Just keep an open mind. How do you do that? Reflect on this year and write down your start of the year market expectations across three different sections. 1. As expected 2. Better than expected, and 3. Worse than expected. Now, be honest, as nobody is watching. Put down your market calls and allocate them to any of the three boxes. If you are like me, you will have almost nothing in the first box and plenty in boxes 2 and 3. Realising one’s miserable ability to anticipate should be humbling but equally freeing as you should realise how varied and hard it is to meet your expectations with ultimate reality. This, my friends, should give you fodder enough always to keep an open mind. Try it out.
For us investors, this concept is particularly crucial. The financial markets are a realm of uncertainties and surprises. An investment strategy or asset class that you expect to perform well might underperform, while another you doubt could exceed all expectations. This unpredictability is not a flaw of the market; rather, it's an inherent characteristic that savvy investors learn to navigate. By categorizing your expectations and their outcomes, as suggested, you start to appreciate the complexity and unpredictability of the markets. This exercise is not just about acknowledging the difficulty in making accurate predictions; it's about cultivating a mindset that is flexible, adaptive, and open to the myriad possibilities that the market presents.
Ultimately, keeping an open mind in investing, as in life, encourages a more balanced and nuanced approach to decision-making. It allows you to weigh different perspectives, adapt to changing circumstances, and make more informed choices. Whether it's embracing a new investment strategy, reconsidering a long-held market belief, or exploring emerging sectors, an open mind is your most valuable asset. It prepares you for the twists and turns of the market, much like the unexpected delights and challenges of a journey. So, as we continue to explore the realms of resilience and open-mindedness in future articles, remember that these principles are not just theoretical concepts but practical tools for navigating the complex and ever-changing landscape of life and investing.
For those of you who haven’t seen the most recent guest article, please look below. I think it packs a punch of all things relevant in macro trading. The best thing is that it’s free.
Let’s now look at the week ahead.