Do personal problems seriously affect your investment/trading performance?

Discussion in 'Psychology' started by helpme_please, Mar 6, 2019.

  1. David Einhorn and Bill Gross are 2 prominent money managers who performed terribly in recent years. They used to be great but terrible today. What is notable is that they are going through divorce. I wonder if serious personal problems like divorce affect investment/trading performance. While I do have personal problems from time to time, it's not as serious as going through a divorce.

    For those here who have more experience, do you think it is wiser to stop or reduce participation in the financial problems when serious personal problems like divorce is going on?
    murray t turtle and tommcginnis like this.
  2. Handle123


    It not like you can quit, it is your business, employees, leases etc...matter of fact this information you rather not have leak out. Investors will exit cause of it. And of course personal problems, not like you can blink twice and all better. Would make more sense to me though to do lighter positions, actually hedge new entries, spread out symbols-diversify more. Do some low priced stocks like GE and work option selling. Man, to lose 35%, what was he thinking, no "Uncle" point?

    Just goes to show no matter how much experience one has, losses snowballs into huge loses if you not concentrating on drawdowns. Everyone has cycles of being profitable and losing, running a parabolic on your equity curve can force you to keep cutting back size till you just waiting for bad cycle to reverse.
    MattZ and smallfil like this.
  3. d08


    It might be wiser to stop but in that state you won't make wise decisions as you're not level headed. This is one of the reasons I cannot do any discretionary trading, to think that my account value is tied to my current emotional state is a scary thought and can completely destroy me. Not to discourage anyone doing it, if you can, it's amazing - keep it up.
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  4. Absolutely, personal things can take their toll. If it's long and drawn out, treat it like a disease. If it's short but painful, wait it out.

    In particular, divorce is one of the toughest things people have to go through, especially if you are a fountain of money. Chris Rock's view is the right one (even he had a rough patch, but this attitude is likely what saw him through it):

    Western divorce is designed to break successful men. Only the best don't break. Be Chris Rock, not Johnny Depp. Lean into the ridiculousness of it and forget any hope of getting out with half your shit as Western divorce is designed to take roughly 60% of your shit, post-tax.
  5. CSEtrader


    Absolutely, it affects.
    Family loss, family struggle, every significant change. be careful and aware, moderate your strategies accordingly.
  6. tommcginnis


    Serious issues can seriously wreck your mind.

    I'd say more, but I'd just be repeating Wikipedia on Maslow:'s_hierarchy_of_needs

    There is no way you're going to trade like a peak trader, when your base has been torn to shit.

    We should *all* have a 25th Amendment.
  7. vanzandt


    Maybe the divorces came about as a result of their terrible performance and not vice-versa.
    Never know.
  8. It is a vicious cycle. A downward spiral to the bottom with both outcomes reinforcing each other.

    A supportive spouse is essential to success.
    tommcginnis likes this.
  9. vanzandt


    The luckiest man in the world is the man who marries right the first time.
    MattZ, PennySnatch, Onra and 2 others like this.
  10. ?
    #10     Mar 6, 2019