In it, we look at the problem of overtrading, and why many traders cannot simply do nothing. Its especially true for those thrill jockeys who trade less for investing and more for the buzz.
The accompanying podcast is here:
Here’s an excerpt:
"Let’s be blunt: There is something exhilarating, even thrilling, about trading.
The adventure of putting a position on, the buzz of watching it rally — it can
be such a delight that it almost feels illicit.
Clearly there is a rush to trading, especially when the market is really hot.
But if you are getting that excited by trading, then the odds are you have
become far too
emotionally involved in the trade.
This is a huge mistake.
Investing is serious business, with real dollars at stake. There are far
cheaper, less dangerous ways to buy a thrill — snorting cocaine or hang gliding comes to mind —
than trading and investing."
There’s nothing wrong with having, say, 5% of your portfolio in a "mad money"
account for more speculative trades or just to have "some skin in the game." But
if you are trading to get your jollies, then you are not spending your money
So today, I’d like to talk about nothing; specifically, about doing
Sometimes, it pays to turn the old cliche on its head: Don’t just do something, sit there!
Prior Apprenticed Investor columns can be found here.
Apprenticed Investor: Nothing Doing
Real Money, 7/14/2005 10:22 AM EDT