Yesterday was Yom Kippur, which translates to “Day of Atonement” and is one of the High Holy Days in the Jewish religion.
As part of the holiday, participants read a list of sins (available here), apologize for those committed, and ask for forgiveness. Read the list ... even though much has changed in the World... apparently, human nature hasn’t changed much.
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 …).
I’ve had a reasonably challenging year. Instead of feeling like a victim or using the struggles as excuses, Yom Kippur is a day to look back honestly, reflect, and choose to be better.
To help mark the day’s importance, participants read a prayer called the Unetaneh Tokef. Below is a brief excerpt that captures the spirit.
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.
On one hand, you can read that and pray for Divine intervention (or perhaps favor), or you can recognize that we each have a choice about who we want to be, how we show up, and what we make things mean. Your choices about these things have real power to create the experience and environment you will live in next year.
This time of year, we can also learn from many other cultures. For example, the Japanese art of Kintsugi. In Kintsugi, the Japanese mend broken pottery by gilding the fractures with gold, silver, or platinum. This treats the breaks and damage as an element that adds value and enhances the beauty of an object (preserving a part of its history) - rather than something that diminishes the object.
This concept is an excellent reminder as we unpack the “trauma” of shootings, culture wars, actual wars, and more. Our steps backward are just as much a part of our journey as our steps forward. As you heal, it is also important to remember to heal the World around you. In the Jewish faith, that concept is called Tikkun Olam.
One of the themes of Yom Kippur is that you’re only one good deed from tipping the scale towards good for yourself and others. As you recognize and repent for your sins, it’s also important to appreciate the good you did (and do) as well.
As I look at my year, atone, and look forward, I'm reminded of two definitions I heard recently.
One is that “intelligence” can be defined as the ability to get or move towards what you want … and the second is that “learning” is the ability to get a better result in the same situation.
I choose to look at going forward as a chance to clear the slate and Be and Do better … personally, professionally, in the business, and in relationships. I know that there’s lots of room for improvement, opportunities for growth, and the ability to simply put the past behind me and focus on a better future.
Initially, I looked at Capitalogix as a technology company that built trading and fund management capabilities. Over time, I realized that the team, our tools, and the things we do backstage are more valuable than the front-stage results that we produce. We can leverage these to amplify intelligence in virtually any industry.
The future is going to be about making better decisions, taking better actions, and continually improving performance. That won’t really change. Almost everything else will. So, the business is really about the things that don’t change.
I think this is probably true in life as well. Many parts of you change … but the part of you that doesn’t is really the core of who you are.
There are Less Than 100 Days Left in 2024.
There are only 80 days left until 2025. Many will spend those days stressing about the upcoming election, grumbling about inflation, and pretending it’s the universe’s fault they didn’t accomplish what they set their mind to ... yet, it’s also enough time to sprint, to make a change, and to end the year on a high note.
There is plenty of time to make this your best year yet. What can you do? What will you do?
What could you do to make the life of someone around you better? Likewise, how can you let others know you’re thankful for them?
To reference a book by Ben Hardy and Dan Sullivan, transformational change is often easier than incremental change (because you don’t have to drag the past forward).
So, what can you do that would trigger 10X results? Will you?
I hope you all experience growth in your mental state, your relationships, and your businesses.
Best wishes for a great day and an even better year!
Old School Wisdom Isn't Always So Wise ...
When I first got interested in trading, I relied on traditional sources and old-school market wisdom. For example, I studied the Stock Trader’s Almanac.
While there is some real wisdom in some of those sources, most might as well be horoscopes or Nostradamus-level predictions. Throw enough darts, and one might hit the bullseye.
Traders love patterns ... from head-and-shoulders, to Fibonacci sequences, and even Elliot Wave Theory.
Here’s an example from Samuel Benner, an Ohio farmer. In 1875, he released a book titled “Benner’s Prophecies: Future Ups and Downs in Prices,” where he shared the often-referenced chart called the Benner Cycle. Some claim it’s been accurately predicting market fluctuations for over 100 years. Let’s check it out.
Here’s what it gets right ... markets go up and down ... and that cycle continues. Consequently, if you want to make money, you should buy low and sell high ... It’s hard to call that a competitive advantage.
Mostly, you’re looking at vague predictions with +/- 2-year error bars on a 10-year cycle.
However, it was close to the dotcom bust and the 2008 crash ... so even if you sold a little early, you’d have been reasonably happy with your decision to follow the cycle.
We use a form of cycle analysis in our models … but it’s more rigorous, nuanced, and scientific than the Benner Cycle. The trick is figuring out what to focus on – and what to ignore.
Just as humans are good at seeing patterns, even where there are none ... they tend to see cycles that aren’t anything but coincidences.
In trading, “alpha” measures the excess return created by manager skill rather than luck or movement of the underlying market. As you might guess, both “art” and “science” are involved in that calculation. Profitable traders want to believe it’s a sign of their skill, while losing traders prefer to blame luck.
Nicholas Nassim Taleb pointed out in “Fooled by Randomness” that many successful traders, even those with decades-long careers, were likely more lucky than skillful. They just happened to be at the right firm, on the right trading desk, at the right time.
That said, I believe technology, algorithms, and AI are evolving into Amplified Intelligence - the ability to make better decisions, take smarter actions, and continually improve performance. We’re about to experience a huge asymmetric advantage ... those who understand technology and science (math, statistics, game theory, etc.) will have a real edge over those relying on more primitive techniques or gut instinct.
In a sense, this is another type of cycle.
The best traders I know believe that “smart money” takes “dumb money”. While it may sound harsh, this cycle has played out repeatedly over time. Cutting-edge science can seem like magic to those who don’t understand it. However, these capabilities give a significant advantage to those who possess and use them.
I believe the gap between smart and dumb money is widening. That represents a massive opportunity for those who recognize what’s coming.
This is a reminder that just because an AI chat service recommended something that made money, doesn’t make it a good recommendation. Those models may do some things well ... but they also might just have made a lucky prediction at an opportune time. Making scientific or mathematically rigorous market predictions probably isn’t an area to trust ChatGPT or one of its rivals (at least if you don’t understand how to ask AI to do something that you understand and believe gives you a real edge).
If you don’t know what your edge is, then you don’t really have one. This becomes even more important in the age of AI. It doesn’t matter if AI does what it’s supposed to unless you believe it is doing what you want.
Be careful out there.
Posted at 06:18 PM in Books, Business, Current Affairs, Ideas, Market Commentary, Science, Trading, Trading Tools, Web/Tech | Permalink | Comments (0)
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