Controlling your environment

So another thing that you might find and this is kind of and interesting way to look at the world…you might have the TV on in the background. You might have it on and muted. And even though it’s subtle, that could be affecting your psychology, especially if you’re trying to stay up on the news, because that’s really like a “current events” kind of outlook on things. I don’t know, especially if you’re a chart reader or a technical trader, or if you’re purely systematized knowing the news might be interesting for when you meet folks for drinks after work have cocktails or if you have some insight that you’re sharing on social media, but I don’t necessarily know that it helps you trade.

And two, there seems to be the very negative overhang on things – there’s the Russian/Ukraine thing. Then there’s China, Taiwan. Then there’s all the stuff with former president Trump and then the midterm elections and then the Fed and inflation and find me a positive story. So if you’re feeling a little blue, turn off the TV, because there’s never really positive news, it’s always like how somebody is struggling, how the world is struggling, how a certain class of people are struggling. And then there’s all the trash talk between various parties like that doesn’t help you spiritually. It’s a type of emotional cancer, so I would get rid of it. And if you know, you’re a financial advisor sitting at a wirehouse, you don’t really need to know things up to the minute, right up to the second because you’re buy & hold. It’s not like you’re going to be making big trades.

You see? And so if your fee for service that’s just the way it works. I think you kind of talk yourself into thinking like, “well, I need to be cutting edge. I need to have all this information” when the reality is, is that you really don’t right? You kind of talk yourself into thinking that you’re more busy than you actually are, because for that business you’re getting paid regardless of what goes on in the market. And if you’re telling these people that they can’t time the market and you have to buy and hold, then whatever really happens during the day on any particular day is irrelevant because you’re not trying to time the market and you’re going to buy and hold.

And if you position size yourself – okay what are those money management programs? Usually buy like 30 to 33 names at about 3% a pop. So if one gets smashed by 50% the portfolio’s down 1.5% per day. If you’re doing that with a certain manager who has a specific style, like a Kathy Wood / Ark kind of a deal, but also in one of those fee for service things, and they’re loaded up in tech. Yeah. They could be blasted. But that was your choice to put that in the asset allocation model. The point of talking about all of this is that you can free up a lot of time and rejigger your day, and also put yourself in a much better move mood, because you’re not letting the negativity, encroach where your boundary is. And that’s why I never put the TV on because there’s nothing that they’re going to say. There’s nothing Melissa Lee can teach me about trading. And there’s nothing that’s that urgent that I’m going to hear on the TV.

There’s nothing that the folks at Fast Money are going to teach me. There’s nothing Jim Cramer is going to teach me because again, the best teacher for what you’re trying to do is you. So you get caught up into this thing because you see everybody else doing. It was like, oh I need a TV. I need a TV in, in my office. And my whole take on all of that is you can kill an enormous amount of time every day. And if you add that up every week, every month, every year, yeah. Do that too. Take a look at how much time the TV is on and if you’re paying attention to it. Because we only have so much time on planet earth and sitting around listening to the TV and people blathering on about the economy. What a waste of time – it doesn’t help you with your job.

It doesn’t help you. Your clients don’t understand it unless your client is Muhammad El Erian. You know what I mean? Or Larry Summer, so save yourself all of that, put on Netflix, watch a movie or put on you know, Spotify listen to some good music or go to and study a foreign language, do something that’s progressive. That’s going to help you grow. So when you’re doing your time blocking, I guess tomorrow of today’s story is I don’t think you need to stay up on current events the way you think you do. And if you spend your day watching the TV, feeding your brain with the current events, very, very little of that is going to change how you handle client funds. And if the rare time that someone might pick up the phone and , ask you about it, it’s okay.

If you have to look it up on the on the spot because you don’t need to have the answers for that kind of stuff. When the clients can go look it up and see it on Twitter, which is what I would coach them to do. If you have any questions, don’t call me, I’ll call you if there’s anything material. So you coach them on how, how you want them to behave.

Folks, it just helps you understand where you’re spending your time and where you’re putting in your effort. Knowing things like current events doesn’t really seem to help people in managing their business. Neither as traders, nor as financial advisors who are doing fee for service style business. And before if you’re a trader and you trade off the news before you call and say, well, I totally disagree because that’s how I do it. You can program the computer to search for certain keywords so that you can take yourself out of that equation.

It might not be as much fun for you, but you can still delegate that to the machine, which is much more efficient and much more fast in terms of understanding and executing that style of trading.

This is a computer generated transcript.

Subscribe to the show  

Click here to  get your free copy of The Inner Voice of Trading audiobook.