"Trust Your Stuff" Investing
There are a lot of corollaries between sports and investing. We all know that winning begets winning. When things are going well, the baseball looks like a basketball. You trade better and react better. On the other hand it works the other way, where losing begets losing. Where it sometimes seems the emotional death spiral will never end.
The trick of course in having long-term success is to stay on the winning track. Some of the keys are getting back to the basics, keeping it simple, trusting in your skill-set and what you do best.
“There’s a great piece of pitching advice which is also pretty good writing advice: pitch, don’t aim. If you try too carefully to throw the ball to the exact spot you want – lower inside corner, say – you’ll lose all your natural motion and throw the ball in a straight line, incredibly easy to predict and thus to hit. A better approach is to trust your stuff. You know what you’re doing, you’ve been practicing forever. Let it fly. That’s how to throw that curve ball high over the strike zone that suddenly surprises everyone by breaking at the last second and dropping into the zone for strike three.” Source
I believe this old pitching axiom of “trust your stuff” is applicable to investing. Often I’ve tried to get too cute with an entry point or get too scared about market conditions that I wind up not executing a trade.
If you have a strong fundamental case, have done your home-work, and see a good risk/reward setup, GO FOR IT. Don’t get scared out of the position due to market volatility. Like in my Annie Duke poker trading tips post, to be a winner you have to have A LOT OF HEART.
The worst feeling in the world is missing out on a big potential gain where you had the fundamentals nailed because you were too chicken to step up to the plate and swing (missing a big trade often leads to the negative emotional death spiral). You have to “trust your stuff”