Nov

30

 I was driving on the motorway I-95 last Saturday, the day after Thanksgiving, to come back home from Washington DC after visiting some friends. There was traffic, but it was acceptable and with a kind of "stop and go pattern." Patterns change all the time, but my wife came up with the usual comment: "You are always on the wrong lane!". For an Italian driver this is quite an outrageous comment, I have to say. In these situations I normally do not change lanes often, I tend to stick to one lane. After all, the distribution of cars in the three lanes should be efficient with cars moving from one lane to the other until drivers see a benefit in changing. With my portfolio of stocks I tend to do the same. When I start chasing sectors and stocks, I do worse than following a buy and hold strategy. The timing is difficult, I end up overtrading and paying a lot of commissions. For some time I noticed that on the left lane there were more cars than on the other lanes because that lane was faster. However, when cars came to a stop, the left and center lanes were much better because they had less cars. You could see drivers shifting away from the left lane in that situation. As the traffic conditions improved, this pattern disappeared. My mind went to the markets and their ever changing nature. Those investors fast enough to notice a new pattern can benefit from the temporary market inefficiencies and I came to the conclusion that I could also ask my wife to help me manage my portfolio. Then, after almost two hours driving, I happened to see the same truck on the center lane that overtook me during the "stop and go" pattern. He remained very likely on the same lane all the time, while I was wasting time and energy.

Scott Brooks adds:

S BI've written about this before, but when I used to have to fight rush hour (I've completely arranged my life to avoid rush hour and I'm successful about 95% of the time), I noticed a few patterns.

Based on a a 8 - 12 lane highway (4 - 6 lanes in each direction), the best lane to be in was the second to last lane (the 3rd lane if there were 4 lanes or the 5th lane of there were 6 lanes.)

The right two lanes had to deal with traffic merging and exiting so they were slower. The furthest left lane was where most people went to "go fast" (as it is known as the "fast lane" or "passing lane"). However, it was my experience that so many people went for this lane, that it got crowded. It had spurts and burst, that were followed by busts.

So people in the "fast lane" would have periods where they got ahead and things went fast. When that happened people in the second to last lane would immediately jump into the left lane to take advantage of the current "trend" of moving fast. That would clear out the second to last lane and "off we'd go in that lane". People in the second to last lane would also be dropping into the right two lanes to exit. The further I drove, the less traffic would get (because as we moved away from the city centers to the outskirts, traffic merging in decreased and traffic exiting increased) and more and more people would exit.

The fast lane people would usually stay in that lane because they liked the big burst of speed that that lane would provide (at least that's my hypothesis) and would fear that they'd miss out on "the next big run" more than they feared getting stuck in motionless traffic.

My theory didn't hold up everyday. Sometimes the left lane would be faster. Sometimes a traffic jam or a "Sunday Driver" would screw things up. But at the margin, the second to last lane was the best lane to be in to make the best overall time when traveling in heavier traffic.


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