It has been a month since my last news letter. There have been a few reasons for this. You are probably being bombarded with opinions about the market and one more was not going to make a big difference. Also, like you I have been managing a challenging situation, and attempting to use the time and changes thrust upon us in a positive manner.
As I did during the GFC in 2008, standing aside from the market is a good time to do some more research, evaluate my methods, gather my thoughts and work on letting go. I have had lots of "could have, should have, would have" moments, balanced out with some hopefully intelligent and rational thinking. Reminding myself we have all been through possibly a one in ninety year event.
This major "correction" is now my fifth one, there have been more but I am counting the big ones, or the ones I remember having the most impact upon me. Those experiences have been the dotcom crash in 2000, the Twin Towers in 2001, the GFC in 2008, the short and sharp correction in 2018 and now this one in 2020. Of course mixed among that are other mini corrections, and longer bear markets like the one from 2000 to 2003. So what, you may think, it's the game I (we) play and if you cant' handle the heat, then get out of the kitchen. I know from 25 years trading experience and now almost 10 years teaching, many will get out and stay out, feeling this time not only has it got too hot but the chef is drunk, gone crazy and throwing knives.
Recently I was on the Australian Tax office website and I saw a page devoted to mental health, specifically addressing the issues of business people and Covid 19. Here is the list.
finding it hard to concentrate
avoiding necessary day-to-day tasks and obligations
feeling irritable, stressed or teary
constantly thinking of work, even during personal time
being unable to sleep
disconnecting from friends and family
changing eating and/or drinking habits.
I am sure many of you have heard or read the advice "trading is a business". I agree because I know from experience that treating it in any other way invites decisions of folly. I am sure all business people reading the list above can relate to those challenging emotions, as will traders. Also, if you think that being experienced, knowledgeable and successful makes you immune to the above, it doesn't.
During my Covid retreat I have been working on my second book, a book about the correlation between a Zen mindset and trading. I normally do not discuss my Zen training, ordination and belief systems here, as for some they are personal and touchy subjects and do not always have a place or fit. However something I discuss in detail in the book is how Zen Masters despite years of training still feel and suffer, they just handle it differently to most. If there is ever a time for us to examine our thoughts, feelings and actions, in the past and for the future, it is now.
If you are experiencing intense feelings of loss and trauma, it is normal and you are not alone, as the ATO have well recognised. How wonderful it is that someone within that organisation has the insight to devote a page to those issues. One of my Buddhist friends (who was just 33 at the time and dying of cancer) said to me "Buddhism is a mindf**k. Well I am sure many of you would agree so can be trading.
Of course not all are suffering. Some traders and investors have done well from the recent downturn. Some sold early and minimised the damage, having cash to buy back in at lower prices. Some shorted the market to make handsome profits, whilst others with experience and courage have been trading the recent volatility to their advantage. Others have chosen to stand aside waiting for the dust to settle. Some did nothing and sometimes that can work in your favour, other times not.
Zen practitioners are encouraged to want less, do less, watch and listen more. Take time out to observe, slow, become in touch with what makes them the person they truly are, with the goal being to be a more happy and productive person. Retreats are encouraged. So for me as a "Zenner" it has been a fascinating time to watch the world do a forced retreat. Retreats are not easy, I have seen people physically run away from them as the challenge of contemplation and rising emotion becomes too much. Others revel in the exploration. But the greatest challenge of retreat is not during but after, because the difficult part is incorporatng your new found awareness into your old life.
So with trading and investing here are some questions you might like to ponder, after the recent climactic two months.
Does the method I was using suit my personality?
Was I over trading?
Am I just gambling without a method or structure?
Did I take too much risk?
Did I do all I could in a very difficult situation and am I just beating myself up?
Do I need help, either technical or psychological?
Do I need a break for a while to regroup?
Do I need more trading or investing education?
Am I addicted to trading and can't stop screen watching?
What the hell am I doing anyway?
I could go on with a very lengthy list but I am sure you get the picture, we bring our personal demons into most areas of our lives, trading is no exception. Now is a great time to not run away from what could be a very necessary retreat and time of personal introspection.
So, will we see each other back in the kitchen? I hope so.
If you are interested in market technical stuff, you can click below for my regular weekly comments.
And again a very relevant quote from my popular Zen calendar
"The average human being looks without seeing, listens without hearing, touches without feeling, eats without tasting, moves without physical awareness, inhales without awareness of odour and fragrance, and talks without thinking."