In the last few days, one of my closest friends, who’s a full-time trader (aka TM), had a huge investment mistake.
He invested heavily in an oil holding with a large amount of leverage and it tanked with the oil market when the reports came out about U.S. inventory levels. He immediately was issued a margin call by his broker and had to either liquidate or wire in funds. I believe he did a combination of both but in the end liquidated his position and took a $300,000.00 loss. For most people, this would have been a backbreaking experience. Extremely painful it seems.
Yet he was undeterred. He basically shrugged it off and instituted some innovative measures. He became more determined and went ahead and hired a programmer to build some codes which would help him better identify opportunities and risks. He also digitally created a better trade plan for improved risk management to help prevent this same occurrence in the future.
What I find important about this example is that, often, the impetus for change or innovation stems from an adverse event and then finding the will to improve and build upon it. It is rarer that an individual simple creates and innovates without an inciting incident. Those people are considered wise. It seems that most innovators are those who have been through, what many would call, “a lot” (I’m being polite). That’s how certain ideas, such as …. Yet, how do we train our minds to be creative on a regular basis without having a major inciting cause?
I say this because major incidents can really hurt. They change us. It’s human nature to be content and complacent when things are comfortable. But when there is a major event, like with the loss my trader friend had, we are forced to get off our bottoms and change.
Although I feel bad for my buddy, I’d rather listen to the wisdom of others who have gone through the trauma and preemptively create something that solves a problem prior to personally experiencing the pain associated with it.
Would love to hear your thoughts…