Attachment Leads to Jealousy

“Attachment leads to jealousy, the shadow of greed, that is.” - Yoda, Revenge of the Sith

In the same way that golfers tell you that golf is a mental game, being a successful trader and/or investor is all about mindset. First, though, it’s worth defining “successful trader.” I would say that making money qualifies as a success; in other words, you are doing better than break-even. Beating the market is even better, with the KPI being performance vs. the S&P 500.

All traders and investors who experience long-term success do so by following a consistent strategy, whether that means finding value, finding growth, or still something else (like an income-producing options strategy). The key is to be consistent and not be mesmerized by a trade or sidetracked by a ‘hot tip.’ In these short-term options, that means collecting the premium upfront, letting the trade progress throughout the week, and allowing the exit to unfold. If you take possession of the stock, you simply wait until Monday to pursue your exit and start your new trades.

Anakin Skywalker was such an emotional human being that he eventually became the ultimate villain of the Star Wars universe. He had plenty of guidance and warnings from his masters (in the Star Wars world, this is a more endearing and accepted hierarchical term than on earth in 2020). In Episode III, Yoda tells Anakin the following: “Mourn them, do not. Miss them, do not. Attachment leads to jealousy, the shadow of greed, that is… Train yourself to let go of everything you fear to lose.” Wise indeed. While he was not teaching Anakin about leaving past positions in the past —whether they were missed trades or losing trades — it is still remarkably applicable for trading. It’s because of snippets like these that Star Wars has such an enduring legacy.

In the end, however, Anakin ignores the wisdom passed down to him. Too much short-term thinking, too much emotion. Not enough logical, steady thinking. He proceeds to kill younglings, set the Jedi Temple ablaze, force choke his wife, and then battle his master and best friend; the battle’s conclusion is not pretty. Don’t be Anakin. “Train yourself to let go of everything you fear to lose.”

Regards,
John