Beating Alpha

One of my life fascination has been for the past ten years a craft of trading financial markets. Unlike other crafts, trading has one “disadvantage”. It is more art than science. As a trader you must deal with incomplete information and many unknowns that can ruin your trade. Your biggest enemy is yourself and your prehistoricOs. Learning to trade is multidisciplinary craft. One has to stay calm, when storm hits. One has to stay true to his merits and act with reason. One must seize the opportunity when the window of opportunity opens up just for a short moment. One must do the deliberate work, the deliberate practice. One must be well prepared. One must be patient to wait for the opportunities to come. Staying on the top of your game, on the of your craft and not get mad by all the stress is like tuning a lute. If you are too tight, you might miss a trade with good opportunity. If you are too relaxed, you might get too big in a not so favourable trade. Trading is about finding the right balance. Balance to be in control. Trading brings all the good and all the bad within you and mastering the craft is never ending journey. This journey brings me truly deep satisfaction mainly because of it’s multidisciplinary aspect. Aspects that might surprise some, aspects that teach me how to be good human being and better decision maker.

There is a concept I like to use when talking about our ego. Rather than calling it ego itself (which in my opinion is multidimensional and sits on top of this concept) , I call it prehistoricOs. A set of drivers we have been given to get out of trees and caves and to fulfil our core primary instinct: to survive and reproduce. Our prehistoricOs served us well for millions of years but it is actually now over the last couple hundreds years is doing more damage then good. We are no longer part of tribes where one if hold different opinion is kicked out of the tribe and dies out of hunger and cold. If you don’t like your tribe, you can easily change it or create your own. Thanks to all the abstract concepts we have created we have now world for which we have not been designed. We can survive much more easily, without all necessary anxieties we are still feeling. All fears we feel has been primarily designed for us not to get eaten but last time I have checked, there were no tigers in the park or supermarket I walk by every day. By recognising this prehistoricOs drivers, we can start to recognise when and why these drivers are being triggered. By understanding that these drivers are not us, but set of instructions triggered by patterns that are played over and over and over again regardless of our own will by prehistoricOs can be very liberating. So what are these drivers. Here is a brief list from a book “A Guide To The Good Life” by William B. Irvine that describes them well:

Many times we try to fill our life with acitivities in order to forget about our deamons. We do not want to pause and be with ourself. Thats scary for many people. Busyness keeps us away from the deamons. We are busy with work, busy with study, budy at the gym, busy with planning our holiday. Busy, busy, busy. We continuously try to escape by keeping the mind busy so we dont have to face it. For many people meditation is difficult because they have to sit still. I get it, it is not for everyone, but the purpose is to stop and slow down. To be with ourself. Learning how to slow down can have many forms but is an essential key to rich living, key to not gettinng mad from all the busyness we impose to ourself. If you choose meditation, sitting still, fishing or chopping woods, do it for the right reasons, do it so you can tune in and become happier in the other domains of your life. Stop tuning out by busyness, find the right balance. 

The more I read about people that are considered conventionally successful in the eyes of society, the more I am realising how misleading this following has been. No this is not a rant or a complaint, but simple review of what we as a society consider to be success and we blindly follow it. We follow only the book covers, the shiny shallow outside view but we are completely missing the point of living which is “to learn, to be loved – to be happy”. Shouldn’t we change this perception of only judging the book by the cover, and start asking if inside these people we consider “successful” are truly happy? Shouldn’t the way of living a rich happy life be the barometer of success? Shouldn’t we glorify those that found internal peace, that found enough, that found their craft that brings them endless joy? Look at figures like Michale Jordan, Tiger Woods or Bilzerian type of billionaires. Figures that we glorify, yet deep down they are insecure, hurt and unhappy. Don’t get me wrong, Tiger Woods or Michael Jordan have both accomplished tremendous achievements in their respected field, but the real questions is: are they happy and was it all worth it? I hope that one day we will have more role models, that have depth and wisdom about how to live truly rich and happy life and we will be able to follow these role models as true role models. Role models we can truly learn from about the way how to live life. True role models. 

I love the short story from the book Stillness is the key:

“Standing in the palatial second home of some boring billionaire, Vonegut began to needle his friend. “Joe”, he said, “how does it feel that our host only yesterday may have made more money than your novel has earned in its entire history?”

“I’ve got something he can never have,” Joe replied

“And what on earth could that be?” Vonnegut asked

“The knowledge that I have got enough”.

Since no completed Todo list does not lead to long term happiness, what does? If we start with Journey and Process > Outcome formula, we will be then facing a question: “what one should be actually working on, what one should devote his life to?”. Stoics have explained this concept very well. One should work on their Internals, on their Virtues. Because your internals can’t be ever taken from you, unlike your externals. You can lose a job, important client, your wealth, or worse you can lose your health or someone close to you in a blink of an eye. All these objects are external objects, objects outside of our circle of control. By focusing on our virtues, we can truly devote our life to wisdom and life long learning that brings so much satisfaction and is not dependent on short term dopamine spikes externals produce. We can truly become rich. Defeat (befriend) envy, jealousy, anxieties, fear, and greed. For the last three years, I have been thinking what those virtues are so they are universal and timeless. So they don’t change with the coming family, with becoming a father or very successful by the conventional measures. Here is the list of virtues I have over the years nourished and settle on …

I strongly believe in the Process > Outcome formula. Process (internals) over Outcome (externals) is a path towards life’s happiness. It is a way how to enjoy the journey of life while maintaining our own happiness no matter what the outside world will throw upon us. It is also very liberating feeling, because suddenly we rely on the journey rather than outcome that is many times outside of our control. We can start becoming more present, more aware of what is going on and not being lost in our thoughts about what will happen next, how it will all end, what we will do next, instead of enjoying what is happening now – giving our best. This Process > Outcome is also helping those workaholics out there with one important thing: that todolist will never end and no single todolist once completed will bring you long term happiness. Why? Because after that one ToDo list, new one comes. It is like hydra. You cut one list, two more lists grow. From that moment on, it is never ending battle for completion with short-term dopamine spikes, exhaustion of your endocrine system a never ending battle. By internalising this formula and knowing your why, we can become more content and happy. We can actually start enjoying the process over outcome.  

Have you ever woke up feeling, “omg, I would love to have nothing on my todolist for the rest of my life”. I am sure most of you did not. Why? Because thats fuc*ing boring. We are ultimate problem solving machines and problems = struggle = struggle creates gems and by solving them our life grows richer and we have better stories to tell. They are natural part of life, the life truth. Our goal is to struggle well and enjoy the journey, because there is no final arrival, no ultimate goal that would make us forever happy. There is just the journey. The process. Enjoy the process, the moments, goals acomplishments wont make you happy.

There is an ultimate question towards own happiness. That question is actually simple: “Why are you doing it?”. Answer to that question will lead towards who are you doing it for? Answer to that question should lead you towards how much of what are you doing you are doing actually, truly, really really for yourself :)? Because many times, we are actually taking on too much and being our worst judge seeking approvals of others. That does not sound like the path towards our own happiness. That sounds like a path towards making happy everybody around us happy except us. But if we are not happy, if we are doing things for wrong reasons, reasons we do not even understand and are simply driven by them, we cant never be truly happy. And if we are not happy, everyone around us will sooner or later be effected by our moods, by our state. You can pretend happiness only for so long but eventually you will crack and become miserable. Some people then treat it by more work, more beating, some by alcohol, some by physical pain (why do you think ultra-trails were invented :). We choose different artificial “cures” to our internal pain, mask them well but actually they are not cures. They are just patches, Ibuprofen for our mind and body because many times we do not understand root causes of our suffering. Of our own beating. But we can turn it around. We can start asking the right questions and honestly, we need help with that. We need right questions to be asked, because questions are the answers. Starting with why and for who is a good start on this root cause healing journey. It might be scary at first, decisions we all have to take along this journey need courage, but eventually it will lead to our true happiness. And that is worth every bit of courage we have.