If you like these, you should buy the book.
==== Do you believe your scaling type of approach in entering and exiting positions is an essential element
in your overall trading success? ====
I think it has enabled me to stay with long-term winners much longer than I’ve seen most traders stay
with their positions. I don’t have a problem letting my profits run, which many traders do. You have to be
able to let your profits run. I don’t think you can consistently be a winning trader if you’re banking on being
right more than 50 percent of the time. You have to figure out how to make money being right only 20 to 30
percent of the time.
==== Did you feel out of place? ====
I felt very much out of place. I was in an artillery unit. Each hour we received weather reports, which we
were supposed to use to derive a composite adjustment factor. We filled out a form specifying the wind .
direction and velocity, air density, temperature, rotation of the earth, ; and other factors and performed a
mathematical process to derive a net t factor. Every time the weather report came in, it became a game to
see Is who could derive this factor most quickly. Before I was there, the speed & record was nineteen
seconds. On my second day there, I broke the record, and I eventually got the time down to nine seconds. I
thought this was great fun. Little did I realize that I was making enemies by the truckload.
The people who were there preferred the new guys being ignorant so that they could have the feeling of
helping to bring them along. Here I was, a new guy, a college kid, doing things better and faster than they
were. I also got three promotions in my first four months, which was unheard of in the marines. All of this
didn’t go over too well. It took me a while, but I finally realized that being a college hotshot was doing me a
lot more harm than good. I made an effort to blend in better, with modest success.
==== I’ve always been puzzled by the multitude of banks in the United States and worldwide that have
large rooms filled with traders. How can all these trading operations make money? Trading is just not that
easy. I’ve been involved in the markets for nearly twenty years and know that the vast majority of traders
lose money. How are the banks able to find all these young trainees who make money as traders? ====
There have been a lot of studies done on that question. A couple of years ago, I read a study on the
trading operations of Citibank, which is the largest and probably the most profitable cuirency trading bank in
the world. They usually make about $300 million to $400 million a year in their trading operations. There is
always some debate as to how they make that kind of money. Some people argue that Citibank has such a
franchise in currency trading that many of the marginal traders and hedgers in the currency market
immediately think of Citibank when they need to do a transaction-and Citibank can earn a wide spread on
those unsophisticated trades. Also, Citibank has operations in many countries that don’t have their own
central bank. In these countries, much or even all of the foreign currency transactions go through Citibank.
The study concluded that if Citibank traded only for the bid/ask spread and never took any position trades,
they probably would make $600 million a year.
==== When you’re interviewing someone for a job as a trader, how do you determine whether they have
that type of commitment? ====
Sometimes it’s obvious. For example, in an interview someone might ask you, “What time do I have to
come to work in the morning?” In my opinion that’s a very bizarre question. Come in whatever time you
believe is appropriate. “How late do I have to stay in the afternoon?” Leave whenever you want. I’m not
going to tell someone when to come in and when to leave.
==== Besides intelligence and extreme commitment, are there any other qualities that you believe are
important to excel as a trader? ====
Courage. It’s not enough to simply have the insight to see something apart from the rest of the crowd,
you also need to have the courage to act on it and to stay with it. It’s very difficult to be different from the
rest of the crowd the majority of the time, which by definition is what you’re doing if you’re a successful
trader.
Many people think that trading can be reduced to a few rules. Always do this or always do that. To me,
trading isn’t about always at all; it is about each situation.
So many people want the positive rewards of being a successful trader without being willing to go through
the commitment and pain. And there’s a lot of pain.
Sometimes the reason people lose is that they’re not sufficiently selective. Upon analysis, a trader may
find that if he only concentrates on the trades that do well and lets go of the other types of trades, he might
actually be successful. However, if a trader analyzes his trades and still can’t make money, then he probably
should try another endeavor.
What is the first rule of trading? I would argue that before anything else, the prospective trader must find
the approach that he or she is comfortable with-that is, the approach that suits the trader’s personality.
McKay cites this quality as the single most important element separating winners from losers, Each trader
must select the appropriate market arena, choose between system trading and discretionary trading,
fundamental and technical methods, position trading and spread trading, short-term and long-term horizons,
aggressive and conservative approaches, and so on. For all of these opposing choices, one alternative will suit
the trader’s personality, while the other will lead to internal conflict.
Karl Popper has championed the idea that all progress in knowledge results from efforts to falsify not to
confirm, our theories. Whether or not this hypothesis is true in general, it’s certainly the right attitude to
bring to trading research. You have to try your best to disprove your results. You have to try to kill your little
creation. Try to think of everything that could be wrong with your system, and everything that’s suspicious
about it. If you challenge your system by sincerely trying to disprove it, then maybe, just maybe, it’s valid.
My instinct was to not trade, but I had other concerns. I take the point of view
that missing an important trade is a much more serious error than making a bad trade. In any worthwhile
system, you have all kinds of backups to protect you (that is, to assure that you get out) when you take a
bad trade. On the other hand, typically, if you miss a good trade, you have nothing to protect you-that is,
nothing in the system will assure that you eventually get in. Also, missing a good trade can be demoralizing
and destabilizing, especially if you’ve been in the midst of a losing period. And like so many bad trading
decisions, it ends up costing you more than just the money lost or not made on the trade. Missing a major
trade tends to have a reverberating effect throughout your whole trading strategy. Sometimes it can be
weeks before you get back on track. For all these reasons, I felt that it was inappropriate to not trade.
==== Of course, you can’t actually prove that price behavior is random. ====
That’s right. You’re up against the problem of trying to prove a negative proposition. Although the
contention that the markets are random is an affirmative proposition, in fact you’re trying to prove a
negative. You’re trying to prove that there’s no systematic component in the price. Any negative proposition
is very difficult to confirm because you’re trying to prove that something doesn’t exist. For example, consider
the negative proposition that there are no chocolate cakes orbiting Jupiter. That may be true, but it’s very
hard to prove.
The random walk theory has the disadvantage of being a negative proposition. Nevertheless, in the
absence of any evidence to the contrary, it might be a plausible theory to maintain. At this point, however, I
think there is enough contrary evidence so that any academic who still espouses the idea that the markets
are random is not looking at the realities.
==== Is there anything unique about your approach to money management? ====
One drawback to many money management schemes is that they are wedded to the assumption of a
logarithmic utility function. Essentially, this model assumes that the increase in people’s utility for additional
wealth remains constant for equal percentage increases in wealth. The problem with this model is that it is
unbounded; eventually it will tell you to bet the ranch.
There is a technical objection to unbounded utility functions, which is known as the St. Petersburg
Paradox. I can give the thrust of it with a simplified example. Suppose you have a billion dollars. If your
utility function is unbounded, there has to be an amount of money that would have such large utility that
you’d be willing to flip a coin for it against your entire billion-dollar net worth. There’s no amount of moneyalthough
there may be nonmonetary considerations (perhaps an extra hundred years of life)-for which a sane
person would gamble away a billion-dollar net worth on the flip of a coin. Therefore, there must be something
wrong with unbounded utility functions.
We use only bounded utility functions in our work on risk management. The particular utility functions we
use also have the desirable technical characteristic of optimal investment fractions being independent of
absolute wealth level.
==== Can you expand on what you consider the normal human habits that lead to losing? ====
Decision theorists have performed experiments in which people are given various choices between sure
things (amounts of money) and simple lotteries in order to see if the subjects’ preferences are rationally
ordered. They find that people will generally choose a sure gain over a lottery with a higher expected gain but
that they will shun a sure loss in favor of an even worse lottery (as long as the lottery gives them a chance of
coming out ahead). These evidently instinctive human tendencies spell doom for the trader-take your profits,
but play with your losses.
This attitude is also culturally reinforced, as exemplified by the advice: Seize opportunities, but hold your
ground in adversity. Better advice to the trader would be: Watch idly while profit-taking opportunities arise,
but in adversity run like ajackrabbit.
One common adage on this subject mat is completely wrongheaded is: You can’t go broke taking profits.
That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals
go broke by taking small profits. The problem in a nutshell is that human nature does not operate to
maximize gain but rather to maximize the chance of a gain. The desire to maximize the number of winning
trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the
least important performance statistic and may even be inversely related to performance.
==== Are there any other natural human tendencies that you think tend to sabotage success in trading?
====
There is what I refer to as “the call of the countertrend.” There’s a constellation of cognitive and emotional
factors that makes people automatically countertrend in their approach. People want to buy cheap and sell
dear; this by itself makes them countertrend. But the notion of cheapness or deamess must be anchored to
something. People tend to view the prices they’re used to as normal and prices removed from these levels as
aberrant. This perspective leads people to trade counter to an emerging trend on the assumption that prices
will eventually return to “normal.” Therein lies the path to disaster.
==== Having seen people who have survived as traders and those who haven’t, what do you think are the
characteristics that differentiate these two groups? ====
The people who survive avoid snowball scenarios in which bad trades cause them to become emotionally
destabilized and make more bad trades. They are also able to feel the pain of losing. If you don’t feel me pain
of a loss, then you’re in the same position as those unfortunate people who have no pain sensors. If they
leave their hand on a hot stove, it will bum off. There is no way to survive in this world without pain.
Similarly, in the markets, if the losses don’t hurt, your financial survival is tenuous.
I know of a few multimillionaires who started trading with inherited wealth. In each case, they lost it all
because they didn’t feel the pain when they were losing. In those formative first few years of trading, they
felt they could afford to lose. You’re much better off going into the market on a shoestring, feeling that you
can’t afford to lose. I’d rather bet on somebody starting out with a few thousand dollars than on somebody
who came in with millions.
==== Do you find it difficult to deal with the emotional impact of large losses? ====
In many ways, large profits are even more insidious than large losses in terms of emotional
destabilization. I think it’s important not to be emotionally attached to large profits. I’ve certainly made some
of my worst trades after long periods of winning. When you’re on a big winning streak, there’s a temptation
to think that you’re doing something special, which will allow you to continue to propel yourself upward. You
start to think that you can afford to make shoddy decisions. You can imagine what happens next. As a
general rule, losses make you strong and profits make you weak.
==== What advice do you have for dealing with the emotional pitfalls inherent in trading? ====
Some people are good at not expending emotional energy on situations over which they have no control.
(I am not one of them.) An old trader once told me: “Don’t think about what the market’s going to do; you
have absolutely no control over that. Think about what you’re going to do if it gets there.”
In particular, you should spend no time at all thinking about those roseate scenarios in which the market
goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things
you want least to happen and on what your response should be.
==== Is it meaningfully tougher to lose 4 percent when you are trading $100 million than when you’re
trading $1 million? ====
It is tougher. Dollars have a lot to do with it, too. There are plenty of traders I know who show track
records with an amazing cumulative winning percentage. I’ve seen situations where they might be up 1,000
percent over a five-year period, but if you examine their track record in terms of net dollars made or lost,
you discover they are actually down.
==== Because they made the large percentage returns with small capital and then lost money when they
were managing large sums? ====
Exactly. I’m not in the business of picking CTAs. But if I were, one of the first screens I would use would
be a person’s total dollar profit- how many dollars did the CTA pull out of the market. If that number were
negative, I would eliminate the CTA from consideration, regardless of the percentage return.
==== Are there any technical indicators in the public domain that you find useful? ====
Moving averages are useful. They’ll work if you watch your risk management. I believe you can make an
above-average return by using moving averages, if you’re smart about it.
==== Any indicators that yon consider overrated? ====
Most of the common ones: Fibonacci retracements, Gann angles, RSI, and stochastics. I haven’t found
anything there for any of these indicators.
==== So you believe in streaks? ====
Yes, not just in trading, but in most things in life. If a team has won eight games in a row, you don’t bet
against mem winning their ninth game.
==== Are there trading errors that you’ve learned to avoid? ====
In general, I don’t like placing stops. If you’re a big player, you really have to be careful about putting
stops into the market.
==== What you’re saying is that not all confident people are going to be good traders. However, are nearly
all good traders confident? ====
Yes, I would think that virtually all good traders are probably confident in their trading ability.
==== Do you remember when you really became confident as a trader? Is there some transition point that
you can recall? ====
I guess by the time I decided to go off on my own I was fairly confident. I knew I had to make money just
to pay my rent.
==== Was that confidence derived from the consistency of your retnrns? ====
Yes, I knew I was. getting statistically significant results.
==== You come from an academic background and even did your thesis on a subject related to the
markets. I’m sure you’re quite aware that most of the academic community still holds to the efficient market
hypothesis. Obviously, what you’re doing couldn’t be done if that theory were right? ====
The markets are clearly not a random walk. The markets are not even efficient because that assumption
implies you can’t make an above-average return. Since some people can do that, I disagree with the
assumption.
==== But still, I’m sure a lot of your professors believe in the efficient market hypothesis. ====
Right, and that’s probably why they’re professors and why I’m making money doing what I’m doing. Also,
I think it’s amazing what you can do when you have real money on the line. A person in an academic setting
might think that they have tested all possible types of systems. However, when you have real money on the
line, you can start to think pretty creatively. There is always something else to test. I think that the academic
community just hasn’t tested many of the approaches that are viable. Certainly, if you just spend a short
time doing an academic study, you’re not going to find anything significant. It can’t be any other way. If it
were, everyone would be rich. But if you spend every day of your life researching the markets and have
adequate computer support, you can find stuff that works.
==== They underestimate the difficulty of the game and overestimate the payoff? ====
Exactly. Also, some people blame everyone except themselves when they lose money. It galled me to
read in a recent Wall Street Journal article that some guy actually won a lawsuit against his brokerage firm
because he lost all the money in his account. The point is that it wasn’t even a matter of his broker giving
him bad advice; he was calling his own trades! He sued the brokerage firm, saying that they shouldn’t have
allowed him to trade his account the way he did. I believe it’s a free country, and if you want to trade, you
should have every right to do so, but if you lose money, it’s your own responsibility.
==== Your long-term performance has far surpassed the industry average. To what do you attribute your
superior track record? ====
George Soros has a philosophy that I have also adopted: The way to build long-term returns is through
preservation of capital and home runs. You can be far more aggressive when you’re making good profits.
Many managers, once they’re up 30 or 40 percent, will book their year [i.e., trade very cautiously for the
remainder of the year so as not to jeopardize the very good return that has already been realized]. The way
to attain tmly superior long-term returns is to grind it out until you’re up 30 or 40 percent, and then if you
have the convictions, go for a 100 percent year. If you can put together a few near-100 percent years and
avoid down years, then you can achieve really outstanding long-term returns.
Soros is also the best loss taker I’ve ever seen. He doesn’t care whether he wins or loses on a trade. If a
trade doesn’t work, he’s confident enough about his ability to win on other trades that he can easily walk
away from the position. There are a lot of shoes on the shelf; wear only the ones that fit. If you’re extremely
confident, taking a loss doesn’t bother you.
==== What are the major misconceptions people have about the stock market? ====
They tend to confuse short-term volatility with long-term risk. The longer the time period, the lower the
risk of holding equities. People focus too much on the short term-week-to-week and month-to-month price
changes-and don’t pay enough attention to the long-term potential. They look at all movement as negative,
whereas I look at movement as a constructive element. For many investors, the lack of sufficient exposure to
high-returning, more volatile assets is their greatest risk. In my opinion, investment vehicles that provide the
least shortterm volatility often embody the greatest long-term risk. Without significant price movement, you
can’t achieve superior gains.
==== What are the traits of the people who are successful in this business? ====
They’re open-minded and flexible. They’re also risk takers, because they believe in what they’re doing.
==== That routine being what? ====
My approach is to confront losses even before they materialize. I rehearse the process of losing. Whenever
I take a position, I like to imagine what it would be like under the worst-case scenario. In doing so, I
minimize the confusion if that situation actually develops. In my view, losses are a very important part of
trading. When a loss happens, I believe in embracing it.
==== You said earlier that you were drawn to a trading career because of the analogy to playing cards. Do
you then see trading as a form of gambling? ====
I’d say that gambling is the wrong term. Gambling involves taking a risk when the odds are against you.
For example, betting on a lottery or playing a slot machine are forms of gambling. I think successful trading,
or poker playing for that matter, involves speculating rather than gambling. Successful speculation implies
taking risks when the odds are in your favor. Just like in poker, where you have to know which hands to bet
on, in trading you have to know when the odds are in your favor.
==== Specifically, what traits would you look for? ====
Essentially, I would look for people with the ability to admit mistakes and take losses quickly. Most people
view losing as a hit against their self-esteem. As a result, they postpone losing. They think of all sorts of
reasons for not taking losses. They select a mental stop point and then fail to execute it. They abandon their
game plan.
==== What do you think are the greatest misconceptions people have about the market? ====
In my opinion, the greatest misconception is the idea that if you buy and hold stocks for long periods of
time, you’ll always make money.
==== What would you say to the trader who says, “I’m making money overall, and I’m using stops to limit
my losses, but I still have a lot of anxiety about trading. I still can`t stand to lose.”? ====
I would tell that trader to think of each trade as one of the next one thousand trades he’s going to make.
If you start thinking in terms of the next one thousand trades, all of a sudden you’ve made any single trade
seem very inconsequential. Who cares if a particular trade is a winner or a loser? It’s just another trade.
==== That is exactly the attitude I find so fascinating. Your portfolios went from being up sharply the night
before to a 15 percent loss the next morning. Most people would have some very negative emotions in that
type of situation. How were yon able to respond with such emotional aloofness? ====
You have to put it into perspective. I’m fond of thinking of trading in terms of scores of years. If I live long
enough, I’ll trade for fifty or sixty years. I figure that, over that time span, I’ll see devastating declines,
spectacular advances that I virtually can’t believe, and everything in between. If you have done mental
rehearsals to see how you would react in different catastrophic situations, then when such an event occurs,
you become curious.
==== Is this advice that you give to people in general-try to be an observer of yourself? ====
Absolutely. I couldn’t recommend it more. If instead of saying, “I’m going to do this trade,” you say, “I’m
going to watch myself do this trade,” all of a sudden you find that the process is a lot easier.
==== How does having this observer help your trading? ====
The observer is able to say, “You’re getting greedy on this trade, watch out.” You might be straining and
struggling because some of your indicators are bullish and some are bearish, and you don’t know what to do.
The observer might say, “How about doing nothing? You don’t have to trade.” This concept is something I
would recommend not only for trading but for life in general. There’s no reason why you have to struggle and
strain and claw your way through life.
==== Does it ever bother you when you lose? ====
Not at all. It never bothered me to lose, because I always knew that I would make it right back. I always
knew that no matter what happened, I
How many times have you heard someone put down an idea you’re excited about by saying, “If it’s such a
good idea, why isn’t everyone doing it?” This is the battle cry of mediocrity. Think about it for a minute. Any
investment opportunity that everyone else is doing is by definition a bad idea. I would always recommend
doing the opposite. The reason markets get out of line is because everyone is doing the wrong thing. The
good trader always sticks with his own ideas and closes his ears to the why-isn’t-e very one-doing-it cry of
the crowd. He’ll make a trade against the crowd at a conservative level that he can afford, and then get out if
he’s wrong. That’s what a stop is for. could go into any marketplace, with any amount of money, and make
a living.
You need to have the courage to stand up against the crowd, decide your position, and execute it. One
experience that really brought this home to me was when I was taking flying lessons. I had the theory down,
but not very much experience. I was coming in for what was my second or third landing. When I was only
about twenty or thirty feet above the mnway, several gusts of wind blew the plane all over the place. I fought
the plane down for what was probably the worst landing ever in history. When I finally brought the plane to a
stop, I was actually chuckling at how terrible a landing it was, wondering what the instructor would say.
“Well, that was really impressive,” he said.
I laughed a little more and asked, “What was impressive about that? I thought it was terrible.”
He replied,. “I have never seen any other beginner do that. Any other beginner would have taken his hand
off the stick, given up, and expected me to land the thing. You hung in there and implemented the program
all the way until the landing was complete.” He paused for a moment and added, “You’re right, though, it was
terrible. Just terrible.”
I thought about that later and realized that that is the trait you have to have to trade.
==== What do you do to prepare? ====
I go through a mental process. I decide what I’m going to do when X, Y, or Z happens. IfX, Y, or Z is a
surprise, then you’re part of the crowd.
==== Basically, your plan was to let the market run until there was some sign of meaningful weakness.
====
Right. Unfortunately, when the market dropped, it lost 25 percent of its value in one day. Needless to say,
that was a particularly painful loss. But the point is that I still ended up with a large profit on the trade.
In fact, this trade raises the whole question of how you view drawdowns. Most people don’t distinguish
between drawdowns in open equity and drawdowns in closed equity. [The distinction is that open equity
refers to unrealized profits on an existing position. In effect, what Ritchie is implying is that he views a given
loss differently if it is a partial surrender erf profits on a winning trade as opposed to if it is a drawdown in
a’losing trade.] If I protected open equity [i.e., open profits] with the same care I protected closed equity, I
would never be able to participate for a long-term move. Any sensible overall risk control measure could not
withstand the normal volatility in such a move.
==== In other words, in order to score the really large gains, you have to be willing to see those gains
erode significantly before getting out of the market. ====
I can’t see any other way. If you get too careful about not risking your gains, you’re not going to be able
to extract a large profit,
==== Is your advice to people then: Forget what`s out there and do your own work? ====
My advice to people has always been: Stay out of the business; stay completely away from the market.
For novices to come in and try to generate profit in this incredibly complex industry is like me trying to do
brain surgery on the weekends to pick up a little extra cash.
I have a friend who knows three doctors who got together to invest in a stud race horse. When they took
delivery of the horse, they found that it was a gelding. My friend was teasing them about this and asked if
they had ever thought of inspecting the horse. You won’t believe this, but it turns out that they had thought
of it, but they didn’t go any further. So he said, “Well, you guys are all doctors; did you ever bend over and
take a look under there to make sure he had the necessary tools?” If you asked those three doctors
today what their mistake was, I’m sure they would tell you that they should have inspected the horse’s
valuables. They still wouldn’t have learned the lesson: DON’T INVEST WHERE YOU DON’T KNOW WHAT
YOU’RE DOING. If they invest in another horse, they won’t get a gelding, but they’ll make some other
mistake just as laughable……. My willingness to
lose is fundamental to my ability to make money in the markets.
==== And that’s not true of most people? ====
That’s right. Most people come into this business without a willingness to lose money. They also enter the
market with unrealistic expectations. Even if they’re lucky enough to pick a successful trading advisor, they’ll
likely to pull their money out the first quarter he has a drawdown. So they end up losing even though they
may have been in a winning situation.
==== I assume that you probably long ago passed the point where your trading profits took care of any
personal needs or financial security you might envision. In your own case, if the charity aspect were not
there, do you think you would still be trading? ====
I’m not sure that I would be. I just don’t know. Incidentally, let me correct your use of the term charity. I
don’t think in terms of charity. I think in terms of investing in the poor. If someone is starving and you hand
him a buck, you’ve taught him that what he needs is for someone to give him a handout. I prefer to invest in
the poor-to provide capital so they can enhance their own productivity. What the poor need are cottage
industries that allow them to become self-sufficient. That’s the type of funding I believe in, and it may not fit
the conventional view of charity.
I know what I’m going to say can be easily misconstrued, but if I could set up a system where I could
make money off the poor, then I would have achieved my goal. I know that sounds crass. Of course, my
objective is not to make money off the poor, but the point is that charity tends to spawn dependency. That’s
why the Great Society war on poverty was such a failure. In contrast, if I can establish someone in a business
where he can return my money, then I know his situation is stable.
==== Aren’t you concerned that by helping Westernize these villages, their way of life will be destroyed to
their ultimate detriment? ====
It’s a commonly held belief here in the civilized West that the cultures and life-styles of isolated peoples
are to be valued and preserved. And I find that view romantically attractive. I would be inclined to agree with
this premise if only I could find someone in one of these cultures who would stop laughing at it.
An Indian I know named Bee was once read a newspaper article about his beautiful culture. Bee
responded by asking, “Where does this man live that he could be so foolish?” He was told that the man lived
and worked in Caracas. “Why does he sit up there in his comfortable office and write this nonsense about
us?” Bee asked. “Why doesn’t he come down here with his family and join us? Then we can all enjoy this
beautiful place together.” They’re mystified by our lack of compassion. Academics make compelling
arguments extolling the beauty and virtues of Indian culture, but I agree with the Indians.
==== How can people identify what goals would make them happy? ====
One NLP exercise that deals with this question is having people imagine themselves at the end of their
lives. Some people are reluctant to do this exercise, but when I tell them to go ahead and imagine that it’s
been a very long, healthy, and active life, they’re more willing to try it. Then I ask them to look back on what
they have accomplished, and see whether they wish they had done something else or something more.
Although it’s a mind trick, by adopting this end-of-life perspective, unconscious expectations are revealed,
and people find it easier to make an assessment about what they really want to fill their lives. I ask my
clients, “What is really worth the time of your life?”
159
159
The idea for this exercise came out of an experience I had when I was in college. I worked as
an orderly in a hospital ward that typically had lots of elderly patients. Over the course of three years, I
spoke to hundreds of people who were near the end of their lives. I asked these people how their lives had
been, what they liked about their lives and what they regretted, if anything.
==== What did you find out? ====
I found out that falling in love at nineteen was important. I found out that the willingness to take risks into
the unknown, like leaving one’s small hometown, was important. On the other hand, just simply retiring
because of age was something many of them felt was the biggest mistake of their lives.
One thing that really struck me was that not one of these people said they truly regretted anything they
had actually done-what they regretted was what they hadn’t done. They regretted that they had wasted their
lives on petty pursuits. They hadn’t identified their important values and then done everything they could to
fulfill them. The les
son I learned from this experience was the same one emphasized years later in NLP: If we don’t live true
to our values and fulfill them, we experience disappointment and emptiness.
Fernando Quote:
Not that it really matters. Just as with any large population set, the average hedge fund (or average mutual fund) is just as clueless. Thats why hedge funds or mutual funds as a investing-method can never beat their respective index returns on average. Average anything sucks balls =).
-Fernando