This is me entirely and I only recently realized how baked in my structure had become. Annoyance at having to break my routine—even for something that could have been enjoyable—seemed like such an intrusion. As ridiculous as this is, I need to let the greater world back in. And I resent it!
unless you’re managing other people’s money you can sit on cash and wait for home run opportunities. that’s the alpha source most retail investors miss out on because of impatience
Agree whole heartedly. I write as a hobby but Macro is no light hobby. And you have to be kind to yourself. On a weekend, if I am too tired to think through many elements of macro, I have to contain the urge to cheat via AI. Its important to know when you're not in a shape to write.
This is exceptionally well written. Your ability to connect cognitive discipline, investing behavior and the deeper psychological scaffolding behind decision making is rare. Every piece you publish has this clarity and depth. Always worth reading. Thank you for it
Thanks man, like you, i value reader's time and just try to do my best to give something worth their time, i share the same sentiment about your pieces too!
The best example of stepping away as an investor: Stan Druckenmiller's experience during the dot-com bubble and bust
While working for George Soros' Quantum Fund in March 1999, Druck shorted 10 Internet stocks that were up 7-8x. The $200m investment turned into a $600m loss in 4 weeks before he covered. "I was very bruised. I was down mid-teens. I'd never been down double digits before."
A few months later, Druck realized the Fed was pumping money into the economy due to the Asian Financial Crisis, so he needed to go long on tech stocks. He hired two 20-something gunslingers, and his portfolio went from being down 16% in the summer to being up 42% net by the end of 1999.
In Jan 2000, Druck was convinced tech was in a bubble, so he sold all his tech stocks. The two gunslingers were still managing small accounts and were making 8% a day while Druck was out of the market.
In March 2000, Druck couldn't stand it anymore and put $6b into tech stocks at the top, which turned into a $2-3b loss in 5 days. "I was down 18% again. I know I'm an emotional mess."
Druck told Soros, "I'm quitting. I need a break. I'm exhausted."
"I go to Africa with my kids. I don't allow myself to see a TV or read a financial newspaper, so I don't know where anything is. It's a true break, which is something I'd advise young traders to do. If you take a break, take a break. Don't sit there and like trade your own account and mess around.
I come back on Labor Day because my kids are going back to school and I'm sure my wife doesn't want me around the house, so I open up a newspaper and I can't believe it. The Nasdaq has recovered like 70 or 80% of their losses and the S&P is almost back to the high, but oil is up, interest rates are up, and the dollar is up." This has always been terrible for corporate earnings looking forward.
So in Sept 2000, Druck put 350% of the fund into 10-year Treasuries, betting that the Fed would have to stop raising interest rates and the US would go into a recession. He made 40% in Q4 2000 even though he had given up on making money in the year 2000.
"My brain was too messed up in May [2000], and it would not have gotten un-messed up watching that price action. I would go to my grave believing it was by stepping aside and clearing my head that enabled me not only to see the trade but to have the gumption to put it on in size because I needed that four months to rebuild my confidence."
Honest work = honest rest. Thank you for this. I have missed your work muchly. <5<5<5
Thank you so much @lchristopher, honestly touched by this, especially coming from someone whose words always hit the right note🙏
This is me entirely and I only recently realized how baked in my structure had become. Annoyance at having to break my routine—even for something that could have been enjoyable—seemed like such an intrusion. As ridiculous as this is, I need to let the greater world back in. And I resent it!
I hope you find peace soon enough🙏
unless you’re managing other people’s money you can sit on cash and wait for home run opportunities. that’s the alpha source most retail investors miss out on because of impatience
Brilliant point! Strange that self accountability doesnt reign in impulses like that better than the pressure of managing money for others =)
Agree whole heartedly. I write as a hobby but Macro is no light hobby. And you have to be kind to yourself. On a weekend, if I am too tired to think through many elements of macro, I have to contain the urge to cheat via AI. Its important to know when you're not in a shape to write.
Thanks man, totally feel you! Maybe a topic on the discipline of grinding next?😄
This is exceptionally well written. Your ability to connect cognitive discipline, investing behavior and the deeper psychological scaffolding behind decision making is rare. Every piece you publish has this clarity and depth. Always worth reading. Thank you for it
Thanks man, like you, i value reader's time and just try to do my best to give something worth their time, i share the same sentiment about your pieces too!
The best example of stepping away as an investor: Stan Druckenmiller's experience during the dot-com bubble and bust
While working for George Soros' Quantum Fund in March 1999, Druck shorted 10 Internet stocks that were up 7-8x. The $200m investment turned into a $600m loss in 4 weeks before he covered. "I was very bruised. I was down mid-teens. I'd never been down double digits before."
A few months later, Druck realized the Fed was pumping money into the economy due to the Asian Financial Crisis, so he needed to go long on tech stocks. He hired two 20-something gunslingers, and his portfolio went from being down 16% in the summer to being up 42% net by the end of 1999.
In Jan 2000, Druck was convinced tech was in a bubble, so he sold all his tech stocks. The two gunslingers were still managing small accounts and were making 8% a day while Druck was out of the market.
In March 2000, Druck couldn't stand it anymore and put $6b into tech stocks at the top, which turned into a $2-3b loss in 5 days. "I was down 18% again. I know I'm an emotional mess."
Druck told Soros, "I'm quitting. I need a break. I'm exhausted."
"I go to Africa with my kids. I don't allow myself to see a TV or read a financial newspaper, so I don't know where anything is. It's a true break, which is something I'd advise young traders to do. If you take a break, take a break. Don't sit there and like trade your own account and mess around.
I come back on Labor Day because my kids are going back to school and I'm sure my wife doesn't want me around the house, so I open up a newspaper and I can't believe it. The Nasdaq has recovered like 70 or 80% of their losses and the S&P is almost back to the high, but oil is up, interest rates are up, and the dollar is up." This has always been terrible for corporate earnings looking forward.
So in Sept 2000, Druck put 350% of the fund into 10-year Treasuries, betting that the Fed would have to stop raising interest rates and the US would go into a recession. He made 40% in Q4 2000 even though he had given up on making money in the year 2000.
"My brain was too messed up in May [2000], and it would not have gotten un-messed up watching that price action. I would go to my grave believing it was by stepping aside and clearing my head that enabled me not only to see the trade but to have the gumption to put it on in size because I needed that four months to rebuild my confidence."
Video: https://www.youtube.com/watch?v=-7sWLIybWnQ&t=2402s
Wow thanks so much for this awesome share! A pity I did not know before to include in the post, what an excellent example! Thank you!