“Lack of conviction is like negative gamma; it makes you buy highs and sell lows. Big reason why it’s much better to not trade than to trade with low conviction and/or other people’s ideas. Being Long Gamma allows a trader to rule his/her emotions. Being Short Gamma forces a trader to be ruled BY his/her emotions.” – Michael Kao
Reaction ≠ Recalibration—don’t conflate the two. Kao argues in his Exit Strategies piece that the fourth category (“Greater Fool” Backed Only By Technicals) asset by definition implies reaction (e.g., crypto).
Thinking fast and thinking slowdevelop
Next:
- 4-1a4b2b0 Your algo is your principles
- Rules >>> “Decisions”revisit
- 1-1c6a3.0 The decision should be obvious
- 2-1a1a7 ‘Hindsight bias’ - Keep a record of your thoughts at the time you make the decision
- 2-1a6c ‘Inertia’ - In most ordinary moments the situation thinks for us, and these seemingly insignificant decisions compound.
- RUL3 - The transparency principle - make your decision-making process as visible and open to scrutiny as possible
- Rules >>> “Decisions”revisit
- 4-1a4b2b1 ‘One-of-those’ over one-off - Learn from history (not just from your ‘own’ experience)
- FutureSelf
- 4-1a4b2c Asking questions such as ‘what does xxx MEAN to you’ can displace the counterpart from the context of the situation, and allow them to take a step back
- 4-1a4b2d ‘Tendency to want to do something’ - Don’t get paid for work, but for being right.
Related:
- 2-1b3a ‘Circle of competence’ & ‘Niches’ - Build a moat. Thrive in where you can.
- 3-1c3c3a1 Don’t be so attached to anything because almost everything is contingent. Assume no self.
- 5-2b2a Use LATER folder, instead of reactively watching-reading-listening, and give them time
- 10-2g3d1 Humans do stupid things because we can guess and create meanings. Our ability comes with a great cost of potentially doing very (infinitely) stupid things.