A few years ago I had the good fortune to have a mentor, at a moment when I was very receptive to teaching, to listening and not having “answers”.
When the student is ready a master will appear (or something like that). And a few years ago I was ready. I had reached a low point across the board in my life and I was heartbroken, or heart-cracked, in a variety of ways which left me open to change. Ever notice that you can embrace change and start fresh only when you are ready to listen because you finally admit you don’t have the all the answers. That happens after things have gone wrong or at least not as hoped for or expected? Permit me to connect these thoughts to both the markets and life. The more successful risk-taking and risk-managing in both contexts seems to come from those who embrace ritual and process.
Paul Tudor Jones himself related an epiphany some years ago about the randomness of life that may have been a factor in his stellar success in the markets. Howard Marks, of Oakmark Investments, has written about luck and I recall that Warren Buffett also acknowledged how his talents would have been of no help in an entirely different context — that the Oracle of Omaha’s investment powers would have been useless if he was dropped in the middle of the wilderness. Life and the markets are defined in part by random luck. So what are we to do? I suggest that you can consider the power of embracing ritual and process.
Any consideration about ritual and process includes the following questions: How do you create a schedule and how do you actually spend your time? What skills will you learn and what will you actually do each day, week, month and year? Each day we could begin after waking up with brushing our teeth and making our beds (h/t Tim Ferriss) and finish with the writing of notes for our subconscious to manage (h/t Reid Hoffman).
What systems do you develop to monitor the markets, create your range of choices for investment, speculation and risk taking? What rules do you have to take action regarding those choices? These are not the only relevant questions but they will all relate to how we use our time and we choose to do on a consistent basis by design.
The randomness and dumb luck of the world is beyond us. Nobody knows what each year brings us. We command the minutes, however, and we craft routines and processes about how we spend our time in both markets and life. This borders on the pursuit of concepts like “chopping wood and carrying water”. We don’t determine outcomes and output, but we have a lot of say about input and investment of time and resources.
Let me return to the mentor I mentioned. In terms of my past investment experience, I experienced stretches of ennui and disappointment punctuated by bewildering and stunning success — and this pattern was joined at the hip with my life outside of the markets. When things were good, it was really good (even when it really wasn’t in a healthy way) and then when things were not good, boy, was it painful (and unfortunately these stretches of time were all too consistent). During this time, I was fortunate to connect with a handful of interesting fascinating traders, and one market veteran in particular had become a friend.
An entrepreneur and trader, he lived in the Caribbean and traveled all over the world to work and teach. In a moment of clarity I told my friend how things were going, and I was not planning to say anything but it all came out like toothpaste out of a tube. It was at that moment this friend had become my teacher and I was not expecting it. This was indeed a random event. I was reluctant to accept and told him I wasn’t even in the frame of mind or able to afford his services but my friend laughed and said, “just say yes…I will help you to learn to love the markets (and more importantly) life itself”. He did it gratis — a personal example of the good luck which Howard Marks had written about. I had closed trading positions in my accounts, flattened them to cash, and opened my mind. It was time for ritual and process. Every day for nearly six months I was starting over.
I remember finishing my final “assignment” in the wee hours one evening in between Christmas and New Year’s Eve, with a film playing the background. The movie was “The Agony and The Ecstasy”, which was about Michelangelo’s long struggle to create the Sistine Chapel. I remember developing very detailed trading tools which my teacher described as a “magnum opus” (the fraternal/paternal pride of a mentor has a value which cannot be measured). I enjoyed all those hours of discussion based upon my mentor’s assigned readings and material. I will miss that time. Not long after my friend and mentor vanished, just as randomly as he arrived. In the months that followed, I evolved my rituals and process for the market and this began to extend into my life outside of the markets. The heart-cracks were healing over and like that Hemingway phrase, I was stronger in those “broken places” again.
Eventually I was adding new rituals: I was creating materials and notes for others, building a following and engaging the world with my “content” — that is why some of you are reading this piece perhaps. You came for “tickers” and “ideas” but I hope you will consider something more meaningful. The top “idea” I will always have to share is that ritual and process is the answer for the struggles brought by your random passions. I believe that my next ritual will be to help others find their way to create their own set of rituals and process to help them manage the random passions of the markets, and perhaps even the agony and the ecstasy of life itself.
We only have so many minutes every day we are completely aware, only so many hours we are awake each day and only so many days in the year we can use the way we want to. To spend some of our time to develop and practice rituals and process could be one way to reduce the agony and elevate the ecstasy of being alive.
Originally published on January 4, 2017.