My incredibly patient, understanding and quite beautiful girlfriend has to put up with a lot from me, including knowing how to deal with me when my investments don’t go quite according to plan. I hadn’t really given it much thought before, but she commented yesterday that I have different emotional states when losing.
Now, whilst I am getting better at avoiding the big losses, (learning from mistakes of the past), every now and again I still do something that makes me question my sanity.
And as professional as I try to be in my approach, I am still subject to those emotions that drive the market, fear and greed, however much I try to control them. I back teams at too low a price, or I lay teams too high. Losses are part of the business, but there are ‘good’ losses, and there are ‘bad’ losses.
An example of a ‘good’ loss is where I have layed a selection at a price I consider too short, but it goes on to lose. Fair enough. If I’m laying at 1.1, I can expect to lose a fair number of these bets, and I cope with these very positively, even if I do say so myself.
Bad losses I don’t handle quite so well. An example of a ‘bad’ loss is where momentum is heading one way, seemingly irreversibly, and I jump on the bandwagon just as it shudders to a screeching halt and there is that sickening realization that ‘this is not a good move’. Essentially, good and bad losses are defined by whether or not the bet was value at the time it was struck.
So how do I react physically to these different scenarios? Good losses, I’m calm. I don’t mind those (too much).
Bad losses? Well, here it gets a little complicated. As my girlfriend pointed out, sometimes I am banging my desk, shouting out expletives and basically being loud and obnoxious, whereas other times I go very quiet. My worst ever loss, £5,000 on a football match, resulted in my being overwhelmed with tiredness. I literally had to go and take a long nap.
Thinking about this, I’ve realized that I am loud when the setback is sudden (an interception in American Football for example), but where the setback is slow and drawn out, this is where I go quiet (e.g. I’ve backed a team with a good lead, and slowly but surely the other team comes back).
Wins are handled similarly. A win snatched from the jaws of defeat is greeted with loud yelling (is there any other kind?) and on occasion some crazy dancing and gesturing around the living room, whereas a win that I am expecting is treated rather more demurely. Although if the amount is substantial enough, the stupid dancing and arm-waving still happens!
Now, whilst I am getting better at avoiding the big losses, (learning from mistakes of the past), every now and again I still do something that makes me question my sanity.
And as professional as I try to be in my approach, I am still subject to those emotions that drive the market, fear and greed, however much I try to control them. I back teams at too low a price, or I lay teams too high. Losses are part of the business, but there are ‘good’ losses, and there are ‘bad’ losses.
An example of a ‘good’ loss is where I have layed a selection at a price I consider too short, but it goes on to lose. Fair enough. If I’m laying at 1.1, I can expect to lose a fair number of these bets, and I cope with these very positively, even if I do say so myself.
Bad losses I don’t handle quite so well. An example of a ‘bad’ loss is where momentum is heading one way, seemingly irreversibly, and I jump on the bandwagon just as it shudders to a screeching halt and there is that sickening realization that ‘this is not a good move’. Essentially, good and bad losses are defined by whether or not the bet was value at the time it was struck.
So how do I react physically to these different scenarios? Good losses, I’m calm. I don’t mind those (too much).
Bad losses? Well, here it gets a little complicated. As my girlfriend pointed out, sometimes I am banging my desk, shouting out expletives and basically being loud and obnoxious, whereas other times I go very quiet. My worst ever loss, £5,000 on a football match, resulted in my being overwhelmed with tiredness. I literally had to go and take a long nap.
Thinking about this, I’ve realized that I am loud when the setback is sudden (an interception in American Football for example), but where the setback is slow and drawn out, this is where I go quiet (e.g. I’ve backed a team with a good lead, and slowly but surely the other team comes back).
Wins are handled similarly. A win snatched from the jaws of defeat is greeted with loud yelling (is there any other kind?) and on occasion some crazy dancing and gesturing around the living room, whereas a win that I am expecting is treated rather more demurely. Although if the amount is substantial enough, the stupid dancing and arm-waving still happens!
4 comments:
ah yes, handling losses, the eternal question!
Ha, nice post!
It's funny how you know within milliseconds that you've jumped in at the wrong time and the added time spent punching yourself in the face before trading out only makes the loss bigger!
As for the big losses, it affects me in the same way as you mention, where I just feel like my body's shutting down in the knowledge it may take quite a while to get back to where I was before I made that ridiculous decision.
It is no surprise that these errors happen though. There are so many factors to consider, and often, there's so little time to decide. At least if your bank is bigger than it used to be you know the good decisions are made more often than the bad ones.
Thanks Anthony - mistakes are all part of the process, but as you say, so long as the trend is upward, we're doing ok. The big losses are quite unpleasant though!
I recognise those emotions you describe down to a tee! The good losses can now normally be looked on with a small tut or if it's a last minute goal maybe a few expletives will be muttered under my breath.
The bad losses which are made by my so called 'mug punting' ie piling into team x with 60 mins gone because they *will* win are met more quietly. some of my larger losses (not quite 5k but I think 1.3k was my worst) were just met with a stunned silence and then the laptop being quietly closed. I liken this state to the scene from Lock, Stock and 2 smoking barrels where he has just been beaten in his poker game and stumbles out of the building in a daze :o)
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