The Search for Trends Gets Lonely

When you take the road less traveled, you hear a lot of negative chatter from others and from yourself when you don’t perform well. But winners don’t give in or tell people what they want to hear; they stick to the process instead.

It’s easy to focus on results — did you make or lose money? When you win, everyone loves you. When you lose, everyone questions you, demands answers and wants you to change your strategy. As a money manager trying to grow a small business, it’s tough not to empathize and feel the same way. I want to win all the time too — every day, every month, every year.

But markets are a son-of-a-bitch sometimes and they can go through long stretches (months or years) without giving you a pitch to hit. I hate this as much as anyone. Patience has never been a strength of mine, but discipline has. I’ve developed patience through exhaustive research; learning how markets behave and how they cycle between trending on non-trending periods. Knowing this allows me to stick to my strategy through tough times.

If you watched the Super Bowl, you saw two games — one where the Patriots sucked and one where they could do no wrong. The Patriots, unlike the Falcons, didn’t panic when the game wasn’t going their way. They stuck to their game plan and the rest is history. Bill Belichick (head coach of the Patriots) always says, “Do your job” and “Next play”. He focuses on process 24/7. Only the super committed can hear these soundbites, put their frustration aside and execute. Less disciplined players hear this and think “We’re down 25 points in the 3rd quarter, Coach! Whatever, this game is over. We’re done.”

Character plays a big role in winning. Those who let their emotions get the best of them through the ups and downs of investing performance ultimately lose money. If being emotional and undisciplined worked, more people would make money in the markets.

I know it’s hard, but try your best to focus on the process, not the short-term results. No matter what you invest in, expect to go through stretches of losing money. As my wonderful mother always says, “It is what it is.” Losing is part of the game. The path to winning can be a lonely one — one where everyone around you has lost faith, but if you’ve done your work and believe in yourself then I say you’re on the right path.

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