Talents and skills are both cardinal in the trading scene. Although having an element of good luck is a bonus, we cannot depend solely on luck alone. Don't forget, luck and risk are doppelgangers. The difficulty in identifying what is luck, what is skill and what is risk is one of the biggest problems we face when trying to manage money. Countless fortunes (and failures) owe their outcome to leverage. The line between 'inspiringly bold' and 'foolishly reckless' can be a millimeter thick and only visible with hindsight.
Having talents and skills is crucial in creating a workable and repetitive system that compounds and grows wealth. And it is with intelligence, talent, wit, resilience, great analysis , tenacity, proper solid planning and the ability to remain level-headed in all situations that one is able to achieve that. Good investing isn't just about earning the highest returns because the highest returns tend to be one-off hits that can't be repeated. Investing is about earning pretty good returns that can be repeated for the longest period of time, and that's when compounding runs wild. And devising such a system definitely requires intelligence, talent and skills. Hence I cannot negate the importance of them both in the trading scene.
Trading is not sheer luck and waiting for destiny to happen. I believe in seizing the day and working on my portfolio, rather than buying into 'useless' endowment plans and have fund managers manage my money via ETFs. Not to offend anyone, but these are just not my cup of tea. I'd rather have the freedom to manage my own portfolio.
And let me give a little credit to planning too.
Proper solid planning is cardinal to the whole trading scene. Why? Simply put; as Morgan Housel wrote in the Psychology of Money, 'The most important part of every plan is to plan on the plan not going according to plan. A plan is only useful if it survives reality.' How is one supposed to plan without talents, skills, intelligence and wit?
Let that sink in.
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Modify on 2024-06-30 07:43
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I completely agree with your perspective on the importance of talents and skills in the trading scene. Luck may play a role, but it cannot be relied upon as the sole determinant of success. Understanding the distinction between luck, skill, and risk is crucial in managing money effectively.
Leverage can be a double-edged sword, capable of generating fortunes or leading to failures. It is essential to tread carefully and differentiate between boldness and recklessness, which often becomes apparent only in hindsight.
Developing a workable and repetitive system that compounds and grows wealth requires intelligence, talent, wit, resilience, and great analysis. It also necessitates proper planning and the ability to remain level-headed in all situations. These qualities enable investors to achieve consistent returns over an extended period, allowing compounding to work its magic.
While high returns may be enticing, they are often one-off occurrences that cannot be replicated consistently. Instead, the focus should be on earning reasonably good returns that can be sustained over the long term. This approach, coupled with compounding, can lead to significant wealth accumulation.
Managing one's own portfolio provides the freedom and control to make informed decisions. While endowment plans and fund managers have their merits, they may not align with everyone's preferences. Taking charge of one's investments allows for a personalized approach and the ability to adapt to changing market conditions.
Proper solid planning is indeed crucial in the trading scene. As Morgan Housel aptly stated, the most important part of any plan is acknowledging that it may not unfold as expected. Flexibility and adaptability are key when reality deviates from the initial plan. Talents, skills, intelligence, and wit are indispensable in formulating effective plans that can withstand unexpected challenges.
In conclusion, talents, skills, intelligence, and proper planning are all vital components of successful trading. While luck may have a role to play, it is the combination of these factors that allows investors to navigate the markets and achieve long-term success.
Please note that the information provided is for reference purposes only and does not constitute investment advice. Investing in the financial markets involves risks, and individuals should conduct thorough research and seek professional guidance before making any investment decisions.