SurfI was surfing small waves on Wednesday, when time constraints made me catch that one last ride and take it all the way into the shore. Jumping off my board near the beach in one foot of water, my foot landed in a small hole and I ended up spraining it badly. It was sprained badly enough that I required a trip to the ER. Until then, my surf session was textbook perfect, a very mellow session, full of stoke, and without any mistakes. I didn't even make a mistake the way I got off my board, as it was the same way I've done it a thousand times before without any mishap. Analyzing my session that night brought the realization that when conditions are easy and the waves are small, I make more mistakes than normal. I can quantify this as 70% of my surfing injuries occur in easy surf. Last August, I nearly broke my neck in similar conditions, and that injury required surgery and a four month hiatus from the water. It seems that when the waves are small and easy, my confidence level goes up, accompanied by a little carelessness and reckless behavior. I've exhibited the same behavior in easy markets, where things are humming along smoothly, then out of nowhere, my account gets badly injured. This has happened to me time and time again when I find an easy pattern that works for weeks, I get complacent, then the market has a few day limit move against me. Looking back at my own account losses, it's not the volatile markets that get me, but the calm markets that hide a tsunami that washes me ashore and beats me up badly. My lesson to learn is the necessity to be on guard 100% of the time and treat all conditions, market or surf, like a big day at Sunset Beach. The big waves might beat me up a little, but it's the small ones that usually kill me. My grandfather told me that one can drown in a teacup, whether in surfing or the markets.





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1 Comment so far

  1. Steve Leslie on June 26, 2009 7:10 am

    Jeff inspired me to think of these two quotes:

    "Never confuse brains with a bull market".

    Meaning: Everybody makes money in a bull market. Traders, investors, ham-and-eggers, next-door neighbors, everybody. You can trade every day, sometimes several times a day on the same stock and make money. It lulls one into a certain level of hubris and complacency.

    "G_d is in the details." This quote is generally attributed to Ludwig Mies Van Der Rohe designer and architect. It means that things might seem simple and straightforward in the beginning but problems and challenges rise to the surface during the implementation of a task. A 100% commitment is necessary to ensure success.


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