Daily Speculations The Web Site of Victor Niederhoffer and Laurel Kenner

 
 

The Prophet Cont'd

 

Home

Write to us at: (not clickable).
Please include your full name, and omit attachments.

 

So, back to Gibran. What exactly would be required of investors if they married the mistress and bore a child? What tenets might need to ensue to shape the outcome of this emotional and intellectual shift? So Here goes: With all due to respect to the genius of Gibran, I unleash, The New Prophet.

The Profit
And an investor who held a portfolio against his ego said, Speak to us of stocks.
And it said:
Your investments are not your investments.
They are the gains and losses of the Market's longing for itself.

*Ownership of stock is an illusion. Like parenting, investing, when done well, is a thankless job. Of course they may ultimately pay great dividends but the tasks associated with investing and parenting are laborious. The hours stink. Your life is changed. Your needs often buried. With both children and investments we have to manage their well being, make healthy choices for them until they mature, but we never own them fully. They long to belong to themselves. We may revolve our life around them for a time but must ultimately know when to let go. Following sound principles we ultimately participate in our obsolescence in relation to them. From breastfeeding/ prospectus hovering to passive availability whereby a mature stock is on automatic pilot or the eventual pleasant non-maintenance company of an adult child.

The investment opportunities come to you but not from you,
And though they are with you yet they belong not to you.

*Stocks like children belong to the universe. They have a journey of their own and it is up to us as parents or investors to honor that journey. Yuk. This concept is a major bummer and requires great discipline to harness our urges to mold, shape, abuse, disrespect our offspring under the guise of commitment. This idea of a distinct separation of parent and child, of stock and investor, might require major surrender. We are not our children. We are not our investments. But isn't that the entire point of having a child, an investment? To show it off? To make it perform on command? To flank and saddle it with all of our hopes and dreams both fulfilled and unfulfilled? If that were the case one of my daughters would be a Rockette, the other the next Margaret Mead. When left to its own devices, to its own acorn nature, what does a stock or a child want/need to become? It helps to be informed, to acknowledge influences of culture, genetics, internal operations, management. The ultimate outcome and development, however, is not in our control. The management is.

You may give them your love but not your thoughts,
For they have their own thoughts.

*A child or a company may have ideas that we do not agree with. Some battles are best left ignored. At the same time some situations must be addressed. If they are going to remain in our home, in our portfolio, under our care, what limits regarding performance must we set for them? What requirements are respectful of the growth and which ultimately rob both the child and parent of important developments. At what point does a parents ego get in the way of service. The higher the degree of narcissism in parents the higher the degree of psychiatric symptoms in offspring. Can the same be said of investors with troubled portfolios? Do we have what it takes to maintain an honorable, respectful commitment? When must the child be held responsible? When does the manager or parent need further training or enlightenment. It is often easy to blame a child. It can often be misleading to blame the parent. Judicious and frequent reflection, analysis, and education are required.

You may house their bodies but not their souls,
For their souls dwell in the house of tomorrow, which you cannot visit, not even in your dreams.

*Children like stocks are organisms in and of themselves. We feed them, we maintain them, we put a roof over their heads. We can hope that they eat right, don't smoke, ultimately run themselves well and make healthy choices. They may grow up to be fat, thin, or worse, consistently alternate between the two, which is not only bad for one's overall health but hard to watch. Parenting like investing, also renders one so terribly vulnerable. To deny this vulnerability typically leads to overzealous interactions and a sense of control that does not truly exist. An over controlling parent might create a people pleasing child initially but ultimately the life force within will demonstrate itself or become symptomatic. The market will not, and cannot, compromise compliance for activity. Like a child, it is alive, active, yearning for growth. One step forward, one step back perhaps, but volatile nonetheless. Predictions of the future often disappoint. Successful children or stocks are not always apparent in childhood stages.

You may strive to be like them, but seek not to make them like you.
For life goes not backward nor tarries with yesterday.

*Children, like stocks, are free to be. They perform poorly or brilliantly, often with little awareness. When healthy and thriving they are not hindered by perfectionism or expected outcome. Each day is different. Each week, each month, each year. Without direction, they play, they dance, they sing, they sleep, they act out, they behave. It is easy to blame a child or a stock when they don't please us. Might the annoyance be part of a new growth cycle? Might the misbehavior require a judicious intervention. Does the performance require discipline or nurturing? Many a child or a stock has been mismanaged when discipline has been offered when nurturing is required and vice versa. We often don't get a second chance to correct our parenting or our investment decisions. Unlike most adults, they are not yet set in their ways.

You are the bows from which your children as living arrows are sent forth.
The archer sees the mark upon the path of the infinite, and he bends you with His might that His arrows may go swift and far.

*Portfolios and children involve risk and discernment and a flexible interaction of the two principles. With feet planted, and a healthy posture, it's important sometimes to let go, to allow, to lead by following. It requires a maintaining of hope and faith in the unseen. Aim. Release. Over Possession can sometimes distort the target.

Let your bending in the archer's hand be for gladness;
For even as He loves the arrow that flies, so he loves also the bow that is stable.

*Children thrive in an atmosphere marked by the paradox of flexibility and consistency. At each stage sometimes success is immediate. Sometimes success is subtle over time. To lead by following requires the opposite of hubris. It means sometimes we do not know where or how things will land. It means attending to feedback. Knowing when to allow and when to manage. When to say yes, when to say no. When to make demands, when to be patient. It's a thankless job when done well in that it remains clean of self-serving expectation, untarnished by agenda or a need to be loved or admired. A narcissistic and emotional longing for a reflection of itself in parenting or investing is not a true and loyal commitment. The respect and dignity of true commitment is marked by separateness and clear thinking. When mastered, both parenting and investing can lead to the most amazing results over time. In that way, true commitment can be viewed as a delightfully selfish virtue. The greatest dividends unfold when each stage is managed lovingly, maturely, responsibly, and with great humility.

Parenting, investing, even the writing of missives, have a life of their own. In writing this piece I had no idea whether it would end up being serious or playful. I guess this baby must be left to speak for itself.