The investment "game"

My friends have given up on the market. They are fed up with losing money. They have decided to stay on the sideline and wait. I am not sure what they are waiting for. How are they going to decide when to pull the trigger and join the dance? They did not act at the top. Who says they will be able to pull the trigger at the bottom? They know better. Or so they think.

I do not want to make fun of these investors. Absolutely not. The main reason is to make them think.

If you are committed to managing your money, you cannot afford to give up. You cannot afford to leave the table because you will have to spend the time to figure out the new players and what game they are playing when you go back to the game.

This is the key word: “game”. Investing is like a sport game, a card game, a business game. You are trying to make money. You are trying to win so that you increase your winnings and ultimately your capital.

The point, however, is that others, including myself, have the same objective – to increase their capital. And the only way to do it is to take it away from you. In other words, you are playing against all of us. I am playing against all of you.

Investing is a two-person game – you against all of us, you against the market. Winning at any game, especially the investment game, requires concentration. It requires playing the game and building up the psychological stamina to hang on, especially when you get tired.

Losing money should not depress you and force you to leave the table. If you leave, you will never be able to catch up with those who did not leave. You have to have a process that allows you to ride the exciting as well as the depressing phases of the market. Losing money should not scare you. You cannot play a game when you are scared to lose. You refine your game by playing it, to improve your techniques. But you need to have a discipline. Discipline is what you need to profit in a big way when the band finally starts playing.

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977