Monday morning is bin morning in my suburb so on Sunday evening everyone in my street collects their gaggle of variously coloured bins and parks them on the nature strip ready for collection. This morning I get and open the curtains and spy a tradies ute parked right in front of the bins thereby making them inaccessible to the garbage truck. I might add that my street is empty and that there is a clear 50 metres between bins that he could have parked in. Despite this our genius in the ute has managed to park right in font of my bins as if drawn to the magical colours of them like a moth to a flame. Hearing the approaching garbage truck I wander outside and move the bins so that that they can be picked up. The garbage truck driver gives me the thumbs up and then proceeds to give the tradie a blast for being a moron. Said tradie then moves down the road a little. So mission accomplished I think, one bin down and one to go when another idiot in another ute comes and parks directly in front of the one remaining bin. I stand staring out the window at this peanut thinking it just must be moron Monday.
Other than pointing out that most people are completely oblivious to their surroundings whats the point of this little missive. All of our actions both micro and macro have consequences, if we undertake a certain course of action then a series of events will cascade out from this action. These consequences may only affect us (unlikely) or will spread out like ripples and have an impact upon others. I want to concentrate simply on the notion that our actions generate consequences for us. However, I need to take a step back because the primary issue here is the recognition that everything you do has a consequence and that moving forward at anything requires you to be able to understand what these consequences might be. As an example I was once having a chat with a friend who is a criminal defence barrister and over breakfast we were having a chat about your average and not so average criminal. He said there were two basic types. The first simply lacked the ability to foresee any consequences of their actions. So when they rob the local service station and are caught in the act on wonderful high definition CCTV they are stunned when the police knock on their door an hour later. To them the fact that they could be caught was a complete surprise. The other sort of criminal are those that think they are too clever to be caught – think white collar crime or your average banking executive.
The turnips who park outside the front of my house directly in front of my bins fall into the first category – they are unable to conceive that their actions have consequences, in this instance for someone else You can probably add in a dose of simple being a selfish arsehole into the mix as well. It is not quite true to suggest that traders cannot conceive of the consequences of their actions since they do plan for one consequence – being right. This is generally the only outcome they plan for and this involves small flights of fantasy as they imagine what they will spend the gain from their winning trade on. In this respect traders are much like lottery contestants – not much thought is given to what happens if things dont go according to plan.
Trading is a prepare for the best but plan for the worst profession in this respect it has much in common with golf. In golf a match is won by minimising and managing the number of catastrophic errors that may crop up. In part this is why golfers work with a caddy and spend so much time working on course management – they are trying to work out how best not to screw it up. And if they do screw it up how to get out of trouble. It is this how to get out of trouble that is missing from most traders arsenal because of a failure to understand that things go wrong and therefore have consequences. Throw in a healthy does of ego and you have the make up of most traders.
