Money Mongoose

Temperament, patience, poker and investing

I have said many times that there are a lot of similarities between poker and investing and you can bring lessons from the poker domain into the investing domain.

In poker, “steaming” can be said to be a state of anger, mental confusion, or frustration in which a player adopts a less than optimal strategy, usually resulting in poor play.

To be successful in investing requires several things; chief among these are patience and calm temperament. While I am calm, I am not naturally a patient person and so this requires some discipline on my part.

Well, yesterday, I was steaming. I have one speculative investment that I had started building a position in but it was only 1/10th of my desired position size. I was already annoyed that in Q4 of 2018, I was not able to add to my position (due to cash flow issues) when the price was low, but in January, I received my bonus and had funded my account on Wednesday and was ready to place my order after work.

When I got to my computer, I noticed that the stock had jumped moments before by some 5%-8% due to an announcement that I was anticipating (but expecting to happen later). Ordinarily, I would have been a bit annoyed, but thought “no big deal, let’s wait for the price to recede after the news is digested and buy when the price is right – in the worse case, there will be other opportunities”.

But not yesterday. I was frustrated. Maybe it was a bad week due to everybody at home being ill, but I just lost it and decided to buy my full position at the new high prices and not content with that, also revised the buy order on another speculative stock from my target price to the market price and bought that at a higher price too.

That seemed enough to get it out of my system and I shut down my computer and went to bed.

Maybe in future, I need to take some valium before starting any trades! ­čśé


Comments

3 responses to “Temperament, patience, poker and investing”

  1. […] ran out of money at the end of last year. This stock was the second stock referred to in my post Temperament, patience, poker and investing. I picked up more at the higher price in the $15 range and those shares are up around […]

  2. […] In this case, the reminder was redundant as the shares in question were for Zynex (ZYXI) and these were the shares I mentioned in my post Temperament, patience, poker and investing. […]

  3. […] talked about experiencing emotions while investing in the post:┬áTemperament, patience, poker and investing. While I typically avoid investing under emotional influence, when I have no choice, I try to take […]

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