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The Secret to Investing Success


It's probably not what you think.

Wow. This week marks a year of sharing my trading thoughts here in the 'Ville. And what a year it's been! We navigated through some incredible, breathtaking, historical moves in the market in terms of percentage, volatility, government action, and of course, emotional upheaval. I've met a lot of you and heard from a lot more. And though it's been a one-way communication with the majority, I certainly hope my comments have added some color to your investment ideas.

And yes - it does feel like I've been a Minyan forever. I think I'll always feel like a student of the market -- starting my fifteenth year in full-time trading -- and certainly not a professor!

Today, I want to share what I believe is an essential trait that successful investors and traders share; the one single component that makes them victorious in their pursuit of profitability. I don't think we can bestow that honor to stock-picking skills or account size, or
even the numbers of years spent behind trading platforms. Just like in any other endeavor, it isn't the enthusiastic start or the expensive gadgets that determine the outcome. The secret of success in investing, I believe, lies in learning from your trading mistakes and failures.

To most, this might seem an incongruous thought. Some think that always being right is the key determinant of success. And yet others are led to believe that their failures stem from not having the cutting-edge stock-picking technology. But think about it: Avoiding failure is an option investors and traders don't have. After all, they're dealing with constantly moving targets and too many unknowns, and they'll encounter failure very early on. But more often than not, they'll blame the markets or a vague entity referred to as "them."

"The real difference between people who pull themselves out somehow versus the people who do not, says Susan Nolen-Hoeksema, a psychologist at Yale, is that some slip into 'rumination' - a spiral of morbid self-involvement that's extremely difficult to shake. But what
separates the ruminators from the resilients? Why is it that the same set of circumstances that drives one person deeper into the mud makes another stronger….? How can we learn, as Samuel Beckett put it, to 'fail better'?

" 'Failing better' boils down to 3 things. It's a matter of controlling our emotions, adjusting our thinking, and recalibrating our beliefs about ourselves and what we can do in the world."

I highly recommend this article on failure in Psychology Today.
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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