The itch that needs scratching
Life is rarely consistent. Whilst we're aiming to be as rational as possible, following our heart allows us to feel human!
Consistency is a prerequisite for success and I often preach about it’s importance. Success requires repetition of a set of correct habits over a sustained period of time. Whilst doing the same thing over and over, without letting the whim of our emotions dictate our days action may generate substantial results over the long run, it doesn’t make us feel alive. Whilst habits are rational, they make us robotic. Feeling alive and excitement are on the high frequency spectrum of emotions. They aren’t rational but it’s completely reasonable to want to feel that way. We’re humans. Sometimes we do things…just because we can and it’s what we want!
My approach to trading/betting is 99% rational. Its formulaic and revolves around strict entry/exits. It’s dull but profitable. The remaining 1% is where I allow myself to be reasonable. Past weekend was a perfect example of that. England were in the Euro final. There’s a well documented home bias where people prefer to invest in companies in the country they live in while ignoring the other 99% of the market. It’s not rational, especially if there is better opportunity elsewhere. But when you consider that investing effectively requires betting on strangers, the familiarity aspect is what sometimes helps us make that leap of faith required to remain backing those strangers. The same applies to betting and this largely sums up my rationale for having a punt on England this Sunday. We were poor for most of the tournament. Spain were playing well and we were the rightful underdogs. We had fumbled the previous final and have not won a tournament in over 60 years. A statistical trading like approach would have pointed towards backing Spain. I would’ve walked away with a tidy profit and it would have been business as usual. But this Sunday I wasn’t interested in business. I didn’t want it to feel like work. I just wanted to feel alive. I likely won’t see England in more than a handful of finals in my life so if having a small punt on my home team on a special occasion itches that scratch hard enough for me to not let my heart over head bets spill over into my day to day protocol, then it’s quite reasonable to do so.
Trump assassination
Across the pond we saw another cataclysmic event by which Donald Trump was nearly killed on live TV in a failed assassination attempt. The probability on him winning the presidential race subsequently shortened up by 20 ticks and he now sits at 1.44. I’ve been advising some private students to back him since he was 2.3 so our position has matured wonderfully since. In light of Joe Bidens visible cognitive decline and the democratic party in disarray (Joe Biden is still trading at 1.33 in the Democratic nominee market if you want to take that on), the stage is set for Trump. The markets peculiar response to the incident can probably be better understood within the context of history. Ronald Reagan polls surged in similar fashion after his assassination attempt when he was a nominee.
Whilst I believe Trumps will win, his price is on the short side and I do expect a better price closer to November. The assassination attempt has caused an over reaction and I do expect the race to still be close. Polls are NOTORIOUSLY inaccurate: The Brexit vote was 1.12 to remain, Hillary Clinton was 1.25 to win the 2016 election. Trump is 1.44. I believe the Los Angeles, New York, London dominated media was largely responsible for wildly underestimating the swathes of conservatives across middle America and Britain. Whilst a Trump victory this time will no longer be a surprise, there are still several catalysts that could play a part. Biden in all likely will run (1.33 is a valuable bet) at this point, barring him dying, nobody would be foolish enough to run against Trump. There is historical precedent for assassination and voting impact. The swing states will also be a factor and something that I’d be keeping a close eye on in the run up. We can not rule out further guerrilla warfare/assassination attempts from unhinged individuals and groups alike either. Societal cohesion is at it’s absolute lowest. No candidate can be perceived as a unifying figure. We are in unchartered territory and possibly on the brink of civil war.
These developments will be closely followed along with the correlated impacts in the cryptocurrency sphere which will be detailed in the next premium newsletter.
Last Sunday, I had my first guest on the substack podcast (extension of my existing AMT podcast on Youtube/Spotify) where we discussed several topics that every trader will be able to relate to. We go deep on topics dealing with losses, the impact on personal life, the importance of mentors and the journey from losing to winning.
To listen to the full interview, become a premium member by subscribing below. I’ll look to bring guests on regularly when possible. Speak soon.
AT