The Wall Street Journal ran a tabloid-like article about Monroe Trout. The article spoke of a lawsuit between Trout and his brother. Why mention this article? The piece that ran in the Journal also poked fun at Trout for following the philosophical tenets of Ayn Rand.
Rand’s teachings and writings rooted in laissez-faire capitalism are the ground upon which successful traders should stand:
Man’s mind, states John Galt, the protagonist of Atlas Shrugged, is his basic tool of survival. Life is given to him, survival is not. His body is given to him, its sustenance is not. His mind is given to him, its content is not. To remain alive, he must act, and before he can act he must know the nature and purpose of his action. He cannot obtain his food without a knowledge of food and of the way to obtain it. He cannot dig a ditch, or build a cyclotron, without a knowledge of his aim and of the means to achieve it. To remain alive, he must think.
Thinking is not an automatic process. A man can choose to think or to let his mind stagnate, or he can choose actively to turn against his intelligence, to evade his knowledge, to subvert his reason. If he refuses to think, he courts disaster: he cannot with impunity reject his means of perceiving reality.
Rand is more than relevant. Think about this excerpt from Rand’s writing within the context of trading. Are not blindly following your broker’s opinions, listening to David Faber, chatting at Motley Fool, griping at RagingBull.com, trading RSI or watching support/resistance levels all actions demonstrating your choice not to think? Aren’t you allowing your mind to stagnate by evading the pure reality by relying on others to think for you and distort it? Following the hollow messages of other so called experts of trading courts disaster. We are sure all readers know at least one person who went bankrupt in the market by refusing to think for himself.
Trading is a zero-sum game. It’s you against the world. It’s not you and your friend or you and your broker fighting together. You are left to objectively use your mind to determine the best course of action in order pull a profit from the other traders in the world who are competing with you at the game. You must dig deep to understand why one course of action is better than another and avoid decision making based on fear. Pure fear is why the Nasdaq rose so far and plunged so low. And those who controlled their fear with confidence in themselves and their decision-making made a killing.
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