Become A Perpetual Student

My wife is home for the summer (she's a high school Spanish teacher) and currently working on her dissertation for her Ph.D. Recently I saw the drawing by Francisco de Goya on her desk. When I asked her what the words "Aun aprendo" meant - she replied "I am still learning."

The point is that no matter how old and experienced we get, there's always something new to learn and to improve on. One of the common traits I have found among all good traders and investors is that they're always a perpetual student of the markets, economy, and the companies they trade and invest in. That's also what makes this game so interesting and challenging. Just when you think you've got it figured out, the environment changes and you have to adjust. I'm seeing this more and more in trading. As new tools come online and program trading becomes more prevalent, the indicators that I have used several years ago no longer work as well as they once did. In addition, some methods of trading are simply not as profitable as they once were.

Sometimes the learning process also requires being willing to have others provide you some feedback. I'll give you a recent example that isn't market-related but still illustrates this important point. After a few high score rounds of golf in June (high 90s), I decided that it was time to have an expert take a look at my golf swing and to see what was going on. The symptoms were obvious that I needed some help. I was not hitting the ball very far, many shots went to the right, and I also started getting some back pain after golf. Since I had heard good things about Rod Lidenberg, a PGA Master Professional, I decided to call him up and schedule in a lesson this past Saturday. The golf lesson was very productive.

Rod took a video of my swing from different angles and we then spent some time talking about a major issue that had developed without me knowing it (i.e. my downswing was out of plane causing severely mishit shots). More importantly, Rod informed me that if I don't make some swing changes and soon, that I would eventually injure myself to the point that I couldn't play golf again. That served as quite a wake up call and I would have never knew of the problem if I hadn't sought his advice. Rod also provided a helpful set of practice drills that I could use that would correct the problem.

The bottom line is that if something is going wrong (in trading or whatever else you do) and you see the symptoms, it is very important that you take steps to correct them as soon as you can before bad habits develop. That's obviously more difficult to do with trading/investing because it isn't easy to hire a pro to look over your shoulder. But it is something you can do if you watch for the symptoms (like poor trends in your trading). Many of us will quickly blame the market for bad trades or poor performance, when those things are really only symptoms of greater problems in our strategies. By having the perpetual student mentality always and in maintaining the humility to seek advice when needed, you'll correct those problems early and often before they can really hurt you.

I've been playing golf for so long that it seemed absolutely ridiculous for me to pay $249 bucks for a 75 minute golf lesson. In retrospect, I realize that kind of attitude was not helpful and ended up causing me to develop bad habits and also put me at high risk of injury. The good news is that after some practice every day following my Saturday golf lesson, I had one of the best rounds so far this year yesterday (a 5 over par 77). More importantly, with my new swing I also experienced no back pain and I'm back on the right track.