Social Drinking - Water

A couple of good comments on my last post about ‘social betting’. Jason commented that [financial] investing is a social activity, citing CNBC and stock forums as examples of where traders and investors air and share their views. I agree with all this, although I’m always a little wary of someone talking up a stock or fund in the same way that I’m always a little wary of someone tipping me a horse!

The financial programs on TV tend are often comprised of company CEOs who are hardly impartial, and reports looking to entertain rather than inform. Let’s face it, serious financial reporting would not make for exciting TV.

A lot of the ‘social’ side of financial investing is the human need to be one of the crowd, but following the crowd has been shown to be a poor choice many times in the past. (Just look at religion). In the past I know I’ve been guilty of investing in something because everyone else was. I guess a shared loss was considered less of a concern than watching from the sidelines as friends and colleagues made money. (Same reason why so many people join lottery syndicates I suspect).

Nowadays though I am older and wiser. Financial, and betting, decisions are made by myself, after doing my own research, and it’s better that way. One of my (many) faults is that when something goes wrong, I have a tendency to try and shift the blame. I think I’m getting better at not doing that, but the last thing I need is a ready scapegoat.

It’s true that I do subscribe to Football Elite, but I also read newspapers and Investors Chronicle with their share tips. I don’t buy or sell all the shares tipped, but I do take on board some of the more generic advice given. It’s true that I do back most of FE’s selections, at least in some way, but the decision to do so, and more importantly for how much, is mine.

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." – Charles McKay in Extraordinary Popular Delusions and the Madness of Crowds.

As for listening to any of the tips on the betting exchange forums, well you can forget that because as (sensible) Anonymous says “The useful information on the Betfair forums can probably be counted on one hand”. One finger more like. There are a handful of intelligent posters on there, but most threads are a complete waste of time – full of pointless challenges, "free money" and other attention seeking claims.

When I first joined Betfair, I thought the Forum was a good place to go for ideas, tips strategies etc., but no. Admittedly some of the other betting forums out there are better, and occasionally there's a golden nugget, but for the most part betting is just not a social activity. For all the good intentions that some of these “Betting Clubs” are set up with, does anyone really profit from them? Well, other than the organiser of course.

How is Adam Heatchcote’s service working out – anyone know? His latest post cracked me up. Here’s one of the (self-proclaimed) ace traders, and his latest advice is this – “Stay Hydrated”

One of the most important factors when trading is to stay hydrated. It makes sense and it's the same for anything else you do. I've always noticed that when I'm not hydrated, it's that little bit easier to get irritated or your decisions will start to worsen; ever so slightly your competitive edge is lost. So keep a pint of water next to you at all times. I always make sure I have water beside me, and the times I don't (when I forget) it soon starts to show in my results and slowed decision making. What's worse is that if you're trading and you don't already have the water beside you and you trade a bad race, the first thing that comes to mind is to make it back up on the next race instead of going to the kitchen to fill your glass, the number of times I do this; it's probably been my biggest sin. So choose the latter and get the water straight-away once you notice; it pays of in the long-run. I decided to write this post because I made that mistake today and paid for it.

Also, about one in 50 days I have 'slow hand'. It's like my hand has decided to have a chillout day and I just can't get my reflexes in it to work properly; it feels laboured and is very frustrating! All in all the combination of the mistake and the 'slow hand', today is not going smoothly - but at least I'm not into negative territory.

Stay thirsty my friends. Free advice from the world's most interesting blog...