I got really excited about sharing this blog with all readers and newcomers to the site because 2020 has been a significantly challenging year for all of us particularly in our mental environment. For the first time in years people have had to sit in a room, alone, pondering their existence.
Having missed trading opportunities, fumbled some huge trades and being stuck in "fear" mode, I was surprisingly calm. Upon reflection I was surprised that the new habits were a direct result of reading and internalizing some good books on Philosophy.
I noticed specifically:
- Not reacting to adverse price movements or getting emotional
- Much less resistance to following the plan and assuming less
- Developing patience and fewer mistake purchases
- A great sense of well-being dispite wins or losses
Many of these insights are incredibly important because they supersede trading "skills" and move into performance psychology, self-awareness, mindfulness and accountability. The truth is, if you give 100 people a trading system that is guaranteed to win, 95% won't follow it, the same for diets, relationships and other discipline laden tasks.
In the age of misinformation, it is more important than ever to think objectively, find balance in your psyche and apply it to your trading. If not for the money then for everything else!
I truly believe there is something for everyone in Philosophy and Psychology. There is no point trading if you can't make money and live in perpetual fear.
The following books have helped me develop my own independent thinking and overcome some truly challenging traumatic experiences from trading and otherwise. These are given in no particular order.
The impact from these books has really compounded over time. The more I feel in the driver seat of my conscious life, the better I trade and thus the more I feel I am in the driver seat. As in trading, as in life.
1. Meditations - Marcus Aurelius
“You have power over your mind - not outside events. Realize this, and you will find strength.” ― Marcus Aurelius
Meditations was written by the Roman emperor Marcus Aurelius. He ruled Rome from 161 to 180 and has some of the most striking thoughts and aphorisms I read and re-read to ingrain them into my psychology. Reading meditations helped me let go of the negative emotions I experienced during bad trading days and foster a far more balanced view on winning and losing.
My Breakthrough Moments from the Book
- Accepting what I can and cannot change, ie. past results
- Adopting a calmer approach to adverse situations
- Finding meaning and importance in some things and dropping others
- Learning to avoid impulse and slow down my thinking
Written by one of the most powerful men in history, it's fascinating to see him grapple with issues that are similar to ours. In saying that, reading his meditations shows why he was where he was!
2. Man's Search for Meaning - Viktor E.Frankl
“Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.” - Viktor E. Frankl
One of the very first psycho-philosophical books I ever read was Man's Search for Meaning. Written by a Psychiatrist who was a prisoner in the concentration camps during WWII. This guy was literally analyzing himself during starvation, near death and the most insane conditions one can find themselves in. Through his experience he grew to understand how humans make personal change and essentially decide their own mental experience.
Reading this book helped me have one of my very first psychological "aha" moments Life skills are fully transferable in trading and life, if we can learn and exert control over how we react to circumstances and events, we have the ultimate power to shape our own experience.
Highly Recommended For:
- Someone looking to change a negative belief about themselves
- If you are trying to create or form new habits
- General inspiration and a remarkable story
3. Sapiens - Yuval Noah Harari
“How do you cause people to believe in an imagined order such as Christianity, democracy or capitalism? First, you never admit that the order is imagined.” - Yuval Noah Harari
Although not distinctly in the "Philosophy" category, Sapiens is an incredibly insightful book that helped me think differently about trends in both human evolution and likewise the stock market. As alluded to in the title "A Brief history of Humankind" - it dives into evolution and progress but not only from a biological perspective. It covers how technology, people and trends take place with a very unique perspective giving these changes context and shape.
In relation to my investing and trading, Sapiens made me think about why things are developing as they are. Examples would be the new age of AI, digitization and which stocks to watch in order to anticipate emerging trends and technologies.
During 2020 and the Corona "dip", using this kind of thought process helped me find new trends quickly and search for charts that either confirmed or killed the analysis.
4. Krishnamurti: Reflections on the Self
“Intelligence is the capacity to perceive the essential, the what is; and to awaken this capacity, in oneself and in others, is education.”
― Jiddu Krishnamurti
I will openly admit that a book on self-reflection and what could be deemed “spirituality” made me hesitate to read “Reflections on the Self”. Ironically, this ended up being one of my all-time favorites reads about ego, time and existence and death.
The truth is, the very thing we seek in trading, be that wealth or "success" can be ego driven and dangerous mental states to be and stay in ad-infinitum.
I highly recommend this book to traders and non-traders. Specifically for:
- Anyone who wants another perspective on themselves and reality in general
- People struggling with stress and trading or anxiety
- Those who want to discover some base truths and begin thinking independently outside of prescribed systems
5. The Bed of Procrustes: Philosophical and Practical Aphorisms - Nassim Taleb
“To bankrupt a fool, give him information.” - Nassim Taleb
An unapologetic book full of incredibly dense aphorisms about many themes that tie into trading and investing.
If you are familiar with Taleb, he doesn’t take any prisoners and has packed this book full of nuggets on education, self-reliance and general thinking or philosophy. I found it very useful in questioning the institutions, so called “professionals” and opinions in general formed by others. By listening to some of the Aphorisms I found some interesting perspectives to reshape how I see things objectivity.
A very interesting read for those who like contrarian thinking and to question not only themselves but the world around them. Also, very funny to those who "get it".
- New perspectives on institutions and heuristics
- A way to think about information objectively and disseminate garbage
- Good parallels and questions that touch all facets of investing and life
Wrapping it Up
Philosophy of course can be quite personal. It does however create important linkages and values driven behaviour in our sub-conscious awareness that impacts our conscious decision making. (And determines where we go in life).
I think it’s very important to start at the very root of "the construct" and learn to ask the right questions. Many of the writings here are either old (ancient in some cases) or spoke to me in ways that created new insights, directly resulting in improved states of conscious living.
As a trader, being true to myself, my loved ones and aligning these things with objective truth and authenticity is what produces a relaxed and calm mindset about money.
Even if these books don't tickle your fancy, developing your own philosophy will stand to you in good times and bad!
Please remember to subscribe, thanks for reading!