Lesson Learned

So the Big DoorBuster Plan was a bust indeed! Chalk it up to being a “newby Black Friday shopper!” Driving by the BestBuy at midnight—there was already a line meandering around the corner of the building. Disbelief . . . that’s all I could feel and DOHHH! Maybe next year I will pack a turkey sandwich and park it outside in my soccer chair and forgo the thanksgiving festivities for an early place in line. Count me in as one of thousands of Americans who will overpay for an IBook that my son really needs!
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How did we get to be such patsies?

I heard an enlightening story on my Money Man’s show the other day. Dan was analyzing the reasons people are acting or reacting the way they are to the market’s current situation. The tale crossed between Freud and Skinner (anytime mom is involved you can betcha Freud thought it up—but the story had a definite behaviorist POV). Dan tells it way better than I do but here’s a recap . . . he says that inside all of us there is a little kid, a kid who is playing nicely as he was taught to play. He is good, responsible and obedient. He runs out into the street, very innocently after a ball and gets pulled back forcefully by the arm, spanked and scolded by his mother. So hard is her grasp that all he knows is the feeling of pain in his arm and the words--the harsh words are like daggers from the woman he cherishes and respects the most in this world.

Mom had acted out of love and care when she saw the oncoming car approaching you—she didn’t stop to think, she acts in your best interest and all you can associate with this experience is pain, shame and fear.

So we take that instance with us and store it away in our sub conscience. We are grown-ups now. We are responsible for our family and the financial well-being and futures of our children. We invest and save, we follow the market and it’s pendulum of ups and downs. We are good, responsible and obedient . . . we listen to what the market tells us to do with our money. Just when we are playing nicely—we are abruptly pulled back, jolted by a force that came out of nowhere to twist our arms and egos and punch us in the gut of our wallets and portfolios! Ouch!!!

You’re hurt. You did what you were supposed to yet you are in pain. So now you act out. You make decisions like a hurt, scolded child rather than a clear-headed, rational adult. Making emotional, desperate decisions—selling out when everything’s already gone down or being aggressive and buying more and more and getting burned like the guy who lost 6 billion dollars on a disastrous natural gas buy.

Dan’s message: Take control of your own mind.

Listen for yourself,
The Money Man Podcast: Short Term Trader's Perspective