Collective Intelligence - Market Always Moves to Hurt the Biggest Egos

Discussion in 'Psychology' started by aeliodon, May 9, 2007.

  1. This is the 'secret' of how the market moves. When the biggest Egos in the market crowd think the market is going to stop trending - it just continues unrelentingly. Then whenever the biggest Egos in the market crowd think it is going to continue trending - it changes abruptly.

    Its like there's an underlying collective intelligence that knows which side the biggest egos are and squeezes the shit out of them.

    Even in RE, I know a lot of guys that though RE was way too overbought and that prices would come down. And when that happened they would buy RE on the cheap from all the suckers that bought high - this is pure egotistical 'my shit doesn't stink' thinking. These guys are so screwed now cause RE hasn't gone down at all, and whatever price depreciation has occurred got offset by interest rate increases.

    Remember how Brian Hunter got smoked in the nat gas decline. The market collective intelligence sensed he was both predicting and over leveraged and smoked him. Prediction and over leveraging yourself are the two biggest ego trips. Same thing with VN and thai stocks in 97. LTCM, etc. etc. etc.
  2. lwlee


    Paul? I'm sure Brian Hunter wished it was Paul Hunter.
  3. edited
  4. You want to know when everything is going to go down? Call the BOJ and PBOC.
  5. There is a risk that you're confusing correlation with causation.

    Biggest ego / most obvious ego is strongly correlated with predicting the end of a trend. Perhaps the market just has a higher tendency to trend than to reverse the trend :)

  6. So what's the lesson here?

    One of the most (if not THE most) important things in trading is to check the ego at the door.

    Go forth without ego, then the truth of acceptance becomes that much more easier to grasp.

    It is what it is. Accept it for what it is. Don't try to impose your will upon it for it is greater than you, me or we.

    Strip away your ego, accept your reality and responsibility for your actions which are totally under your control. Large egos only get in the way of the critical self-preservation instinct that is necessary to make it in trading.

    Get over yourself and get on with the trade!
  7. Success breeds complecency. Hubris brings disaster. Soros greatest strength was that he knew he wasnt super human.
  8. ammo


    i was never a good basketball player but i do remember the coach teaching watch the players hips when your guarding him,thats the direction he's going.the market doesn't run on runs on cash so if you watch where the moneys going you'll know the direction,unfortunately we can't get all that data only pieces of it,the guy with all the scientists working for him,has the most data and makes the most money(i.e.goldman,berkshire....