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Invest Like Eli Manning



February 10, 2012 – Comments (8) | RELATED TICKERS: ATPAQ.DL

The word of the day is equanimity:

e·qua·nim·i·ty   n.

The quality of being calm and even-tempered; composure.

To me, equanimity means a non-reactive state of mind.  Don't get too manic about the highs or lows.  I am striving to be more like this in my daily life, though I often cheat and allow myself the highs.  Taking in the good is OK, and in fact probably good for you because is stimulates neuroplasticity in the parts of your brain that are associated with happiness.  One just doesn't want to reach for the good, or strain for it.  Recognize it and enjoy it when it's happening, and then let it go.

Can you tell that I have been doing a lot of studying of psychology lately?  The human mind is a fascinating subject.  I think that much of what one learns from psychology can successfully be applied to the world of investing.  I'm sure that if you have made it this far into my post you are asking yourself...So what on Earth does this have to do with Eli Manning and investing? 

If there was one single person in the world of sports who exemplifies the word equanimity it probably is the quarterback of the Super Bowl Champion New York Giants.  Eli is as cool as the other side of the pillow.  He displays absolutely a amazing composure on the football field.  As a New Yorker, for years I have seen Eli take heat from fans and the media for "being too laid back" or not having enough "fire" and "passion."  I think that the people who said that just don't get Eli.  He cares about his team and winning, he just does so unemotionally.  If he misses a pass he just says, "That's OK, we'll get 'em next time."  As a long-time New York Jets fan, it pains me to say that this unflappable nature has caused me to appreciate Eli more and more every year, to the point now that he is probably one of my favorite players.

By not overreacting and calmly executing his plan, all Eli Manning seems to do is win.  Sure the Giants lost their share of games during the regular season, much like no investor is going to be right 100% of the time. 

Warning digression...This is one of the reasons why I don't like the accuracy % rating here in CAPS.  Who cares if 90% of your investments were successful or 51% if you have the most points in the end, which in the real world equates to money that you can use to take care of you and your family.  And now back to my main point...

I try to remain as equanimous as possible when investing.  Sure muting the highs and the lows might take some of the "fun" out of the winning investments...but it also takes much of the "sting" out of the losing ones.  In the past I would have let a negative investment completely eat me up inside.  I would grumble and obsess about a bad stock pick for eons.  While it is healthy to learn from one's mistakes, The Billion Dollar Mistake is one of the better books that I have read about investing lately, it is unhealthy to obsess over them.  Doing so could prevent you from making a winning investment in the future, or cause you to sell a stock too early just because you hate the sight of it in your portfolio.

A perfect example of this from my real-world and CAPS portfolios is ATP Preferred stock (ATPGP.PK).  My smallish position in ATP Preferred stock (and it's a lot smaller now than when I started) is possibly my all-time worst investment...and I got in after a great deal of carnage had already happened.  It sits as a glowing red beacon in a sea of green on my computer screen every time I look at my investment positions.  This used to really bother me.  Not as much any more.  Deej 2.0 has learned from his investment in the company, but trying not to take the paper loss too personally.  Heck this story isn't over yet anyhow.   I continue to hold it because the risk-reward prospects look too enticing at this point to sell.  In fact, ATP was recently written up as a "Powerball" investment idea in the great series of articles by the blog Whopper Investments:

"Powerball" Ideas- $ATPGP $ATPG preferred / common

There definitely is more than one way to successfully invest, to avoid the yucky skin a cat reference.  I want to be in this for the long haul.  I know tons of people who literally bought hundreds of thousands of dollars in options and puts on a few stocks in one slug.  Did they win big at first? Yes.  However, over time this sort of investing, and style of living for that matter, takes its toll.  The same person who would put their entire portfolio in a few short-term plays like puts or calls and win big usually inevitably gives much of those big winnings back on a bad concentrated bet.  That's what happened to my friend after recently making huge money on Green Mountain (GMCR) and (CRM) puts.  Now they are out of the investing game completely because they don't trust themselves.

Even the hard-driving hedge fund managers who are able to remain successful over long periods of time often burn out and leave the game, or end up having serious health problems at too young an age.  So I strive to practice equanimity both in life and investing by diversifying my portfolio and not getting too high or two low about an investment.


8 Comments – Post Your Own

#1) On February 10, 2012 at 1:01 PM, turb0kat (89.91) wrote:

Nice commentary Deej.  This is why top poker players are often also great investors.  Because in order to be a great poker player you must first master your emotions - or at least keep them in check when making decisions.



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#2) On February 10, 2012 at 1:04 PM, MiQuerencia (42.40) wrote:

Nice commentary today. Thanks Deej.



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#3) On February 10, 2012 at 4:43 PM, portefeuille (98.82) wrote:

end up having serious health problems at too young an age.

Health problems are almost never related to work, at least if they are non-mental and the work is done in an office ...

Eli is as cool as the other side of the pillow.

I may share that talent. My tournament record in fencing (I quit at age 16 or so) was around  3000/50 wins/losses (-> I won or was second in around 150/200 tournaments). And I managed to remain in the top10 in Germany of my "age group" with around 1 h practice per week, the other 2 h or so per week was stuff like jogging and playing basketball). I think I was talented, hehe ...

hard-driving hedge fund managers

I think I beat most of those as well (also with minimal effort and still without secretary, bloomberg terminal, non-free analyst reports, ... which is not fair. I want my secretary. now!).

my "hedge fund" ->

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#4) On February 10, 2012 at 4:45 PM, portefeuille (98.82) wrote:

Health problems are almost never related to work

The main health problem is that most people do not walk to get to work and back, hehe ...

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#5) On February 10, 2012 at 5:11 PM, TMFDeej (97.68) wrote:

I strongly disagree with that statement, port, though I suppose that both of us need eivence to back up our claims.

Thanks for reading and for the comments everyone.

Have a great weekend.


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#6) On February 11, 2012 at 9:26 PM, JSergeant (70.21) wrote:

Hey Deej:


Nice commentary.  Have you by any chance recently read 'Thinking Fast and Slow' by Kahneman. If not you should.  If you have, that may explain your commentary.



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#7) On February 12, 2012 at 12:28 PM, TMFDeej (97.68) wrote:

Thanks.  I haven't seen that one, JSergeant, but I love the subject so I'll definitely check it out.  Thanks for the suggestion.


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#8) On February 22, 2012 at 11:38 AM, TMFDeej (97.68) wrote:

I found my proof, port:

Investment banking can be dangerous for health, study shows

Read more:

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