Breathe. Invest. Joy.
I’m going to suggest today that a specific, very simple meditation can reset you and prevent bad mindsets.
And help you trade better.
Breathe In as deeply as possible over the count of 8 heartbeats.
Hold It in for 4.
Breathe Out all the way by the end of 8 heartbeats.
Hold Out for 4.
I have not been a consistent meditator. I’m ADHD, so I find strict routine boring.
(I do have a non-strict routine though. But it depends- am I traveling for two-three days to do a keynote or workshop, with planes, ubers, hotels? How I do that is different than how I do a week where I’m working at home in front of the computer, with my wife and dogs, taking out the trash, and so on. TMI.)
All that to say: certain meditations for me are just tools to deploy as needed.
I don’t beat myself up with them.
(I got this far writing this piece before a barking dog interrupted. She wanted to come in and my wife likes to be outside longer than anybody! TMI!)
But as I sit here at 9:49, reviewing the portfolio and my system’s analyses, I have to go back to the breathing exercise.
In 8
Hold 4
Out 8
Hold Out 4
(It takes some time to learn the pace for those 8 heartbeats)
Because usually half the market’s reactions in the morning are wrong. Stocks that are going to be fine can temporarily be two standard deviations away from their normal returns at 9:45am.
Breathe.
Relax.
Breathe until you feel a shift.
…it might feel like a sigh, or some other kind of mental or physical relief.
And if your heart is racing, you may want to count seconds instead of heartbeats.
And then a minute later, all the weird values are back to normal.
Not because they metaphysically shifted. Because they were going to anyway, and I had the tools to remain calm and not take action.
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Did you know that anytime you get a panic related cortisol and adrenaline bump, it takes a good 15 minutes for it to leave your system?
That’s a bad time to make decisions. They’ll be reactions rather than responses.
(Ah, there was a technical error in one of my spreadsheets! Fixed it.)
Only one of the stocks I hold is temporarily half a standard deviation out of whack.
It’s fine.
It’s more about whether I’m missing better opportunities. I’ve analyzed more stocks over the weekend. And things change.
So my Robin Hood was up 0.94% today before opening. then negative 0.08%, and still not having done anything, I’m back up 0.26%.
With my system, I should be up a fair amt more by the end of the day.
In Vanguard, I clearly have a different set of stocks- I’m up 0.44%.
(For reference, an investment that does 10.6% growth annually only goes up 0.4% per day.)
So around 10:30 or so, I’ll make some moves. Adding new trending stocks, cutting or wholly selling others.
I have high standards - some would call them unreasonable. But they’re not in my new system.
Grant you, it’s only been a month with this new one, but my HOOD is up 6.44% in that time, and Vanguard is up about 4%. Those are roughly 0.3% and 0.2% per day, respectively. And that’s a pace that, if sustainable, means 112% and 65% gains annually.
For reference, there are some standout investors who’ve done (annually) 300%, 400%, 900%, and the world record is 21,000% or so.
The power of compounding can work for you here, but every negative day has eternal implications.
So I have another unreasonable standard, and that is:
No Down Days.
I feel nervous claiming that. I’m going to be attacked, or called a fool.
Breathing again.
I’m not a neurotic, not entirely. I’m not crazy. I’m just well attuned to my body and understand the mind body connection. (I have a 4 year Master’s degree in acupuncture and Chinese herbs) (“Oh, he IS a loon!”) - T. M. I.
My massage person was like, “You have no knots in your body!”
I said, “Is that weird?”
“Yeah! You must be really hydrated! Everybody has some…
(Me thinking I’m amazing)
“Oh wait, there’s one in your calf.”
(Damn it)
But I do monitor my body for tension and my posture for laziness.
I work out and I take a lot of hot baths. TMI.
I guess I grew up so nervous and afraid (social anxiety and social phobia) (“See, I told you - he’s crazy.”) that I made a habit of relentlessly pursuing ways to avoid feelings of fear and dread.
That led to a lot of changes in everything in my life.
How to relax. Relaxing music. Journaling. Way to much new agey stuff.
Anyhow, my point is, it’s really important for me to manage my mindset, mood, stress, body, mind, everything, in order to made good trading decisions.
Try the damn breathing exercise.
(Now the Vanguard is up 0.56%. It’ll probably keep going up until 2:30 or 3:00pm when people start taking profits.
See ya later!)
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(P.S. Ended the day up 1.36% on Robinhood and up 1.69% on Vanguard.
Purty crazy.
Believe me, I know!)
I really don’t even want to publish this, but what the hey.
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