Saturday, December 19, 2020

Why is it "Vorpal"?

In case you haven’t guessed, this web site is not about trading, it’s really about investing. Lately, it’s barely been about investing at all. But there is a reason for the name, which is to alert all of us that investing is not all like it seems at first. The name is from the Lewis Carroll poem Jabberwocky, which is mostly nonsense except for the part where some poor foe loses its head. The thinking one uses in investing is vorpal.

Because if you have enough data, then it’s too late for that trade.

Because it’s really about investing, and not trading, but you need to lie to the market makers and discount brokers so they feel confident taking on your account and taking the other side of your trade.

Because when you buy your position, which you promise the flash traders (indirectly; they think you are a mark) is a trading position, to be sold next week, you’re really lying and still haven’t closed it seven years later. And their 0.0001 cent per share spread is really not enough at all.

Because contrarian positions are difficult to explain and formulate. And it is incredibly hard to be contrarian to yourself.

Because doing the wrong thing is exactly what they want you to do. So you have to do the other wrong thing, which they didn’t know that you know about, which is what gets you a 10-bagger.

Because life is not linear, science is art, art is not science, and mythology is psychology. When you can read Joseph Campbell, and you find out that the human stories of 6000 years ago perfectly explain the market and the reason for things at this exact moment.

Because businesses are positive sum, trading is zero sum, investing is positive sum, and people convincing you to do the wrong thing is zero sum. And you want to reward the entrepreneurs who build things. If it simultaneously makes anti-capitalists poor? That’s on them.

Because it’s combat when you are always in conflict with the market maker, the forces of ignorance, and yourself.

Because being a student of humanity is sometimes more informative than accounting. But never underestimate the power of accounting. All of the worst policy makers are innumerate.

Because when you have figured it out, you never check your positions anymore, rarely think about when you are going to sell, and you exercise every single one of your long option positions. Which is definitely not what the options market maker was looking for.

Because technical analysis is right 50% of the time, and you can tell which 50% it will be 1.57% of the time, but not until two days after it happened. But since you don't use any of that, who cares?

 

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