Admitting You Are Wrong

We live in a world of confirmation bias.  Confirmation bias lends itself to reinforcing conspiracy theories.  It becomes easy to connect the dots in your brain.  No amount of data will change it.

I have been wrong on decisions way more than I have been right.  Trading will do that for you.  You get the opportunity to make a stake driven decision many many times a day.  It’s not just getting into a trade, but deciding how to manage it and when to pull the trigger to get out.  Every time that I thought I had it licked, the market would crush me.  It keeps you on guard and honest.  It checks your ego.  It also can engender a lot of fear where you feel powerless.

Conquering that fear can be hard and if you don’t you will spire deep into a depression.  Been there done that.

I remember one year when I thought I had it licked.  I was in my thirties. I was smoking a cigar, sitting on my back deck with a bottle of great red wine watching the sun go down. The next many weeks were hellacious for me as I struggled to find that groove again.

I can still hear my middle school basketball coach Richard Tosky’s voice ringing in my ears, “Carter, don’t get cocky.”

I try not to have opinions but I do have strong principles.  As data comes in if you look at it objectively, you can change your opinion. Your base principles rarely change. The key is having principles that are based on positive economics and measurable things, not normative economics and what you feel.  Feelings change and situations change.

Sometimes the world doesn’t fit your principles.  So, you try to fit it as best you can.  In statistics, they call this a Z score. How well does the data fit into a normal distribution?  If it’s skewed way off, time to examine everything if it persists.  Sometimes it’s a one-off, and you ride the storm out.

As I have gotten older, I grow closer to retirement age.  I literally have about 1.5 yrs to work if I want and I can hang it up.  However, there is a gnawing fear inside me.  What if this happens?  What about this?  It can be paralyzing.  I have been to the top of the mountain a few times and knocked off.  I have made bad decisions out of fear that have cost me dearly.  You cannot look back otherwise you will go into a death spiral.

I do know what I like.  I do know sort of how I want to lead my life.  I do have some basic principles.  I will be happy as long as I don’t get cocky and follow them.

I do know this.  People look at other successful people and say, “It’s easy for them to admit they are wrong or appear vulnerable.  They have little to lose since they have enough money/status/reputation/power.”  The thing they miss is that it’s a lot easier to climb the mountain when you are humble and able to see your vulnerability and mistakes.  There is power in knowing your own weakness.

The road to success is paved with failure and being wrong.  You can’t be right if you don’t try.  However, there are paths that were blazed prior to yours.  Sometimes it’s easier to follow them on the way up the mountain.