Work Hard, Prepare, but Don’t Look to be a Hero

• Posted by Greg Harmon
• on April 23rd, 2013

Hero’s are glorified and losers are forgotten. This explains a lot in life. In some areas it is very important to be a hero and not a loser. I just finished reading No Easy Day by Mark Owen. Here is the story of a bunch of Hero’s. Navy Seals battling everyday to make and keep the world safe. It is also a good example of where being a loser results in the ultimate loss, your life. To avoid death these guys are constantly practicing their missions. Drilling situations. Taking target practice. They want their muscle and mind memory to work for them in every mission. No surprises that cannot be handled.

Sound familiar at all? Well It does to me. Another place this is projected is in Trading. Traders also want to be hero’s. Many are ex-military and have a much deeper understanding of what the Seals encounter than I do. Traders also prepare constantly. Whether it is looking at over 1000 charts each week or running scans, or crunching data, most successful traders have put in their 10,000 hours many times over.

But that is where the similarities end. The Navy Seal goes throughout their career largely unheralded and often totally unknown. Success in the task is enough reward. They are not looking to be the hero. Many traders are like that as well. Grinding out winning records and not seeking the limelight. Happy to be successful and keep working at getting better. But not all traders are like this. Many are not content with being successful. They want to be a hero and seem to want everyone to know about it. They reveal themselves daily. Their name does not matter, you can recognize them in a different way. They are constantly fighting the trend, looking for a reversal. In the current market they include top callers in equities. It does not matter that the trend is higher, they will point out some divergence or correlation and proclaim a reversal is at hand. My take is that they do it because being a hero, getting the turn right, is an ego boost and for some high profile traders can make a

career reputation. But what makes this kind of hero different from the Seals is that there is often no risk for being wrong. Scream “The Dow will fall to 10,000”. If it does not you just come up with new metrics why it will happen in the future, but just not now. You get 10, or 25 or 100 more chances because nobody killed you. The other side is also different. If it does fall to 10,000 it is more likely because you were lucky than you were a genius. So why not make bold calls with no recourse? How about because it is a waste of time.

I am not talking about those that have a well thought out thesis, but also understand that they may be wrong, and take action to keep from continuing to be wrong. Everyone has to have a view. Just the prognosticators that are certain and unending in their story despite the actual price action. Sure it is a great feeling to have everyone telling you that you are great. But wouldn’t you rather be good at what you do? Why not just keep being good in an uptrend and then when it changes be good in a downtrend too? Look for the divergences but do not rely on them. Keep working hard, prepare, and when you win you will feel good. But when you lose you will also feel good because you knew how to extract yourself. Act like a Seal, but know that you are not.

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