I had a very interesting discussion with a top investigative journalist in Germany who was different from most. The journalist inquired, “How could you advise on trillions of dollars in a crisis when others are in a state of panic?” It made me think and reflect on what I was doing differently. Yes, there were plenty of studies showing that the more money you gave a fund manager, the lower his performance. Why? He could not change his trading strategy to accommodate the increase in money. It was like driving a VW bug and a Ferrari on the autobahn in Germany. You cannot drive a VW bug at 180 mph.
I engaged in some self-reflection and responded, that I could do the job only because I did not think about how much money that was in the real world – it was all just phone numbers to me. I could handle size because I knew the depth of the market and how to accomplish what needed to be done. But I never thought about the scope of what I was doing in terms of one’s personal life. I could be called into a portfolio that was $1 trillion+ or $100 million and deal quickly to resolve the crisis without thinking about how much money it really was in purchasing power. I replied, “I just did not think about the consequences of what I was doing – I just did the job.”
The reply back was telling as she saw the connection between what I was doing, and what others were doing in different fields. She explained that she interviewed a renowned brain surgeon. The surgeon said he never thought about what could happen if he made a tiny mistake, he never thought about the person possibly never speaking again or whatever the consequence might be. The surgeon responded, when he thought about the implications of what he was doing, he had to retire for he could not act so decisively ever again.
I found the conversation interesting. It indeed caused me to reflect upon my own decision process. Perhaps this was why I was moving to computer models to eliminate that personal opinion. You can do anything if you have no fear – but you cannot do anything if you fear everything to the point you cannot act. It is the paradox of someone who would love to see the world, but is too afraid of dying so they cannot get on an airplane.
NEVER be afraid to question and always ask “WHY?” I use to drive my parents nuts, for I always kept asking “WHY” something would function in such a manner, no matter what the subject matter. The first report I wrote back in 1979 I named for this very quest to know answers – the WHY REPORT.
Successful forecasting, as well as trading, means ALWAYS assuming you are wrong. That forces you to constantly double check. It is equally important to never marry a position. This is what the REVERSAL SYSTEM focuses on. You cannot forecast or trade without knowing where you are RIGHT, while also knowing where you are WRONG.
People keep trying desperately to attack me, claiming I am wrong on something or other. They miss the entire point. Nobody can be always right from the perspective of opinion, for there is a whole world out there to monitor. The key is NEVER try to forecast or trade anything in isolation. Everything is connected.
So it is interesting that this journalist compare me to a brain surgeon. If you think about what you are doing, you may not be able to do the job. This is a curious paradox. Perhaps this is why we need computer models to eliminate that human emotional aspect altogether.