Monthly Archives: June 2008

The Fortune Teller by Caravaggio

The Fortune Teller (1954) by the real Caravaggio shows a confident, young man having his palm read by a fortune teller. See how she gives a knowing smile as she removes a ring from his finger without his knowing.

Watch out for forecasters and their crystal balls, I say, or you risk being conned on two fronts. First, there is the payment for the forecasts, with time and mental energy, if nothing else. Then we pay up again when we act on their predictions.

Dubious wording in FT article

In a Financial Times piece defending speculation, the author writes:

‘Unfortunately, high commodity prices are a necessity. They provide the message that we need to consume less and to boost supplies. Speculators help not only to shape that message but also to accelerate its reception.’

I support speculation but I don’t like how the author use of words, specifically the idea that we ‘need’ to respond to the message contained in higher prices to reduce consumption/increase supplies. I find that an ugly twist on the idea that people ‘will’ respond to higher prices by curbing consumption. It’s the difference between a calling to action and saying what will be will be.



Article Link: Speculators and commodity prices ranks the3500 just e-mailed me to say my blog has been rated 8.1 out of 10, which was nice of them. I give myself 6.5.

Michel de Montaigne teaches trading

Taleb’s top tips

Nicholas Taleb’s top life tips (from an article in the TimesOnline):

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5 Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7 Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8 Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants… or (again) parties.

9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

An important lesson

that I have learned after having distanced myself from trading:

It is that I am, in one sense, ‘wired to lose’. Being of a contrarian mind, I have a tendency to ask ‘why’, to look at the other side of the coin, stay away from the herd, etc. In itself, this isn’t a problem, but trading is as much about getting in as getting out, and looking at my trading behaviour retrospectively I can see that I tend to establish trades that are usually against the consensus or trend with the result that I often have to endure some pain in the short-term; however, when and if the trade eventually goes my way, I am way too quick to close the position, because the contrarian in me is again telling me that the consensus is wrong. I simply don’t give enough room for the trade to carry on. It’s absurd. I know I can’t have it both ways and I realise that I need to have less of ‘me’ in the trade. I’ve only just realised this, so it’s a bit late. Nevertheless, a useful self-analysis if I ever return to trading in a meaningful way.

Two blogs added to the roll