Month: January 2016

1. Happiness does not just make you enjoy life more; it actually affects how successful you are in both your personal life and your professional life.

2. Regardless of the method used, the overall result was clear—happiness doesn’t just flow from success; it actually causes it.

3. When people can afford the necessities in life, an increase in income does not result in a significantly happier life. So why should this be the case? Part of the reason is that we all get used to what we have very quickly. Buying a new car or a bigger house provides a short-term feel-good boost, but we quickly become accustomed to it and sink back to our pre-purchase level of joy. As psychologist David Myers once phrased it, “Thanks to our capacity to adapt to ever greater fame and fortune, yesterday’s luxuries can soon become today’s necessities and tomorrow’s relics.”

4. The bad news is that research shows that about 50 percent of your overall sense of happiness is genetically determined, and so cannot be altered.7 The better news is that another 10 percent is attributable to general circumstances (educational level, income, whether you are married or single, etc.) that are difficult to change. However, the best news is that the remaining 40 percent is derived from your day-to-day behavior and the way you think about yourself and others. With a little knowledge, you can become substantially happier in just a few seconds.

5. In short, when it comes to an instant fix for everyday happiness, certain types of writing have a surprisingly quick and large impact. Expressing gratitude, thinking about a perfect future, and affectionate writing have been scientifically proven to work—and all they require is a pen, a piece of paper, and a few moments of your time.

6. The results from both studies clearly indicated that in terms of short- and long-term happiness, buying experiences made people feel better than buying products. Why? Our memory of experiences easily becomes distorted over time (you edit out the terrible trip on the airplane and just remember those blissful moments relaxing on the beach). Our goods, however, tend to lose their appeal by becoming old, worn-out, and outdated. Also, experiences promote one of the most effective happiness-inducing behaviors—spending time with others.

7. Those who spent a higher percentage of their income on others were far happier than those who spent it on themselves…Ask people whether they will be happier after spending money on themselves or others, and the vast majority will check the “me” box. The science shows that exactly the opposite is true—people become much happier after providing for others rather than themselves. The good news is that you really do not have to divert a huge proportion of your income to charity, friends, family, and colleagues. In fact, the smallest gifts can quickly result in surprisingly large and long-lasting changes in happiness.

8. People behave in highly predictable ways when they experience certain emotions and thoughts. When they are sad, they cry. When they are happy, they smile. When they agree, they nod their heads. So far, no surprises, but according to an area of research known as “proprioceptive psychology,” the process also works in reverse. Get people to behave in a certain way and you cause them to feel certain emotions and have certain thoughts.

Source: Wiseman, Richard (2009-12-15). 59 Seconds: Think a Little, Change a Lot. Knopf Doubleday Publishing Group. Kindle Edition.

Marty Schwartz is an independent trader, who was a legend in the 1980s. He was featured in the first Market Wizards book. Here’s Jack Schwager’s description of Schwartz:

In nine of the ten four-month trading championships he entered (typically with a starting stake of $400,000), he made more money than all the other contestants combined. His average return in these nine contests was 210 percent—nonannualized! (In the one remaining four-month contest he witnessed a near breakeven result.) In his single entry in a one-year contest, he scored a 781 percent return.

5 notable quotes from Schwager’s interview with Schwartz:

1. I always take my losses quickly. That is probably the key to my success. You can always put the trade back on, but if you go flat, you see things differently. The pressure you feel when you are in a position that is not working puts you in a catatonic state.

2. Learn to take losses. The most important thing in making money is not letting your losses get out of hand. Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out.

3. Most people would rather lose money than admit they’re wrong. What is the ultimate rationalization of a trader in a losing position? “I’ll get out when I’m even.” Why is getting out even so important? Because it protects the ego. I became a winning trader when I was able to say, “To hell with my ego, making money is more important.”

4. I always check my charts and the moving averages prior to taking a position. Is the price above or below the moving average? That works better than any tool I have. I try not to go against the moving averages; it is self-destructive. (in his book Pit Bull, Schwartz says that he is using a 10-period exponential moving average).

5. What was your experience during the week of the October 19, 1987 stock crash?

   I came in long. I have thought about it, and I would do the same thing again. Why? Because on October 16, the market fell 108 points, which, at the time, was the biggest one-day point decline in the history of the stock exchange. It looked climatic to me, and I thought that was a buying opportunity. The only problem was that it was a Friday. Usually a down Friday is followed by a down Monday.

   The high in the S&P on Monday was 269. I liquidated my long position at 267.5. I was real proud of that because it is very hard to pull the trigger on a loser. I just dumped everything. I think I was long 40 contracts coming into that day, and I lost $315,000.

   One of the most suicidal things you can do in trading is to keep adding to a losing position. Had I done that, I could have lost $5 million that day. It was painful, and I was bleeding, but I honored my risk points and bit the bullet.

   I thought about going short, but I said to myself, “Now is not the time to worry about making money; it is the time to worry about keeping what you have made.” Whenever there is a really tough period, I try to play defense, defense, defense. I believe in protecting what you have.

   

   Source: Schwager, Jack D. (2012-01-09). Market Wizards: Interviews with Top Traders. Wiley. Kindle Edition.

   Related reading: Size Matters