We're sprinting towards the end of the year. With that, stress and high expectations can lead to anxiety and hurt feelings.
Meanwhile, we just finished the Jewish High Holidays. A few weeks ago was Rosh Hashanah – The Jewish New Year, and this past Wednesday was Yom Kippur – the Day of Atonement. The practice around these holidays is a good reminder to take account of where you are and appreciate the blessings around you. It was a reminder to me to sprint towards the end of 2019 with the energy of a new year.
Yom Kippur is a lot like a Catholic confession, but it happens once a year. The service is a mix of contemplation, mindfulness, and contrition. Ultimately, we apologize for the sins we've committed against ourselves, our communities, our friends, and our faith. Also important is the promise to do better next year. On top of repenting, we fast (no food or water) for a full day to make sure we're mindful. In my case, it also made me sleepy (yes, my son caught me sleeping in synagogue ... I'm sorry for that too).
Looks like I still have some work to do.
It's interesting how little human nature has changed in the past several thousand years. The list of sins is just as relevant today as I imagine it was back then. Even if you have managed to stay on the right side of the Ten Commandments, and haven’t killed or stolen … you have most likely been frivolous, stubborn, hurtful, dismissive, or judgmental (I know I have …).
To help drive the importance of the day, we ceremoniously read a poem called the Unetaneh Tokef. Below is a brief excerpt because it's a powerful read, regardless of faith.
On Rosh Hashanah will be inscribed and on Yom Kippur will be sealed how many will pass from the earth and how many will be created; who will live and who will die; who will die at his predestined time and who before his time; who by water and who by fire, who by sword, who by beast, who by famine, who by thirst, who by storm, who by plague, who by strangulation, and who by stoning. Who will rest and who will wander, who will live in harmony and who will be harried, who will enjoy tranquillity and who will suffer, who will be impoverished and who will be enriched, who will be degraded and who will be exalted.
Equally important to recognizing and repenting for your sins, is recognizing and appreciating what you did good as well ... for yourself, your friends and family, or your community.
All-in-all, it's a nice framework that highlights how you have grown; and, it also shows where you have room to grow.
You have one quarter left in 2019 to make it your best year yet. What can you do? What can you do better?
I hope you all experience growth in your mental state, your relationships, and your businesses.
90th Anniversary of Black Thursday
This past Thursday was the 90th anniversary of Black Thursday, a day when sellers on Wall Street panicked and closed approximately 13 million shares on the NYSE ... causing 5 billion in immediate losses and spurring the Great Depression, easily the worst stock market crash in US history.
With 90 years of education, technology and progress under our belts, we can look back at their mistakes assuming that it could never happen again – but could it?
The years prior to 1929 were filled with post-WW1 optimism and massive speculation. The combined net profits of 536 manufacturing and trading companies in the first six months of 1929 showed an increase of 36.6% over 1928, itself a record half-year. Rural Americans flocked to cities to take part in the excess of the Roaring Twenties. Stock prices were rising and there was massive economic growth. Like many 20 years olds, the '20s was a period where Americans felt invincible, right up until October 24th of 1929. We almost made it out of the decade.
On the day the 1929 Crash started, 11% of the Dow's value was lost by the opening bell. There was so much trading that the ticker tape reports were backed up. Traders had no idea of the true value of the stocks. Panic. Suddenly, 5 billion dollars was gone, along with optimism and trust in the system. By Black Tuesday, several stocks sat without buyers and the Dow drops another 12%. Collective confidence shattered. Psychological traumas compounded until there was widespread economic PTSD. Uncertainty spread like wildfire. Owners of businesses were unsure if they could get credit, workers were uncertain of job prospects or whether they'd get paid. As a result, consumption dropped, businesses failed, banks followed, and shortly thereafter, so did the Great Depression.
From the peak of the Dow (September 3, 1929) to the bottom of the Great Depression (July 8, 1932) the Dow lost 90% of its value.
Human Nature is Human Nature
We've since instituted many measures to protect businesses, banks, and consumers, including measures to suspend trading in periods of rapid decline (like the Securities Act of 1933 and the Securities Exchange Act of 1934). As well, we have a better understanding and tracking of economic barometers like car sales, real estate, etc.
The reality is that in various scales and timeframes human traders undergo the same issues time and time again. It only becomes a talking point when it becomes painful enough.
It shouldn't take mass unemployment and economic contraction for us to understand the dangers of speculation, the dangers of human fear, greed, and discretion, and the dangers of poor economic theory.
Human fear and greed will likely play less of a role in markets going forward. Increasingly more of trading volume is algorithmic. And increasingly more of the decisions are made with AI using more data and shorter time frames. As a result, while I expect increased volatility, I also expect increased opportunity.
Keep in mind that there is a difference between guessing and knowing ... and knowing is more profitable. The corollary is: if you don't know what your edge is ... you don't have one.
Here's to a great last few weeks of 2019!
Posted at 03:25 PM in Business, Ideas, Market Commentary, Trading, Trading Tools, Web/Tech | Permalink | Comments (0)
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