Why Stoicism Is the Best Mental Operating System for Individuals in High Finance

IntroductionThe fabric and culture of today’s modern age and even more so in western society has provided a perfect environment for the re-emergence of an ancient Greek Philosophy, the philosophy of stoicism. Stoicism is a school of Hellenistic philosophy founded by Zeno of Citium in Athens in the early 3rd century BC. It was heavily influenced by certain teachings of Socrates. Roman Emperor Marcus Aurelius, born nearly two millennia ago is perhaps the best-known Stoic leader in history and also holds claims to one of the most famous and unintentional works of stoic literature, ‘the meditations’, his personal journal. In this article I will discuss different stoic exercises and explain how these can be applied to the minds and actions of successful actors within financial markets and institutions.Your new mental operating systemTrain Your Perception to Avoid Good and BadOnce you understand that there is no such thing as obstacles, only opportunities then you have truly mastered your perception.
During the 2007 financial crisis people truly thought a financial apocalypse was inbound however if you have ever seen the hit movie ‘The Big Short’ then you get a perfect example of people who saw disaster coming but instead turned this into an opportunity; by betting against the housing market.
As the Roman Emperor Marcus Aurelius puts it – “The impediment to action advances action. What stands in the way becomes the way”. Ensure you see obstacles as opportunities and understand good and bad are only part of perception; something that is ultimately under your control.Everything is EphemeralRemember your possessions and achievements are only lasting for a markedly brief time in the grand scheme of things. In the grand scheme of things, you are small, everything is. See yourself as part of the bigger system and do what is right here and now.
For professionals working within high finance it is easy to become consumed by the ego and focus on only enriching ones-self, thereby creating a moral hazard. However, if you see yourself as just a cog in an aggregate financial system which is in turn a part of a macroeconomy; then you see the role you play is ultimately, small. In order to benefit the system as a whole you must work with it not against it.Take a Birdseye ViewThis takes a powerful imagination but by doing this exercise you are able to train your mind’s eye to see your life in third person, you can then reflect on your actions and behaviour and also that of others. You can reflect on how others may have felt and what they did after interacting with you.
You also see yourself from a higher perspective which relates to the point I made about how small we are.
And finally, you can compare yourself to someone in a far worse situation, the reason for this is that there is always someone in a worse situation than you. Compare yourself to these people in times of discomfort and struggle and you may find some comfort in the fact that in a relative sense, things aren’t so bad for you.
If you work or reside within a skyscraper or high-rise building, take a real view from above. Combined with this exercise it should help to greatly expand your awareness. Conversely, if not you could always use Google earth live but hopefully in the future we will have services like virgin galactic at an affordable price, so people can get the truly pure experience that astronauts get.
For individuals working at Bloomberg or stock exchanges this exercise could be used for example, if a tsunami hits the coast of a certain region. Use the view from above to assess who and what is affected and follow the trail right back to the stock market and make decisions accordingly.”Is This Within My Control”Learn to differentiate between what’s directly under your control, what you have influence over and what is not under your control. Differentiate what you can change and what you can’t.
Do not waste time trying (and failing) to move immovable objects. Use your precious time productively on things that you do have control over.
Return to this question frequently or when a dilemma emerges, make a note of things that are in your control and things that are not. This way not only will you feel better, but you position yourself with a distinct advantage over people who fail to realise when a battle is unwinnable.
For example, if your employees are snowed in and cannot make it into work, do not be mad as you have no control over the weather.
You also have no control over huge market trends. A very good example of a huge failure to realise what was and what wasn’t under one’s control was the bank of England, who failed to realise they couldn’t beat the market on black Wednesday (Sept.16, 1992); when the pound was pegged to the European Exchange Rate Mechanism. Speculators broke the bank and they were forced to pull from the ERM.Contemplation of The Ideal Man (Or Woman)Humans were not born to be lazy. Ancient man was out hunting lions, fighting battles, saving women from barbarian tribes, the list goes on. But many modern men have been sucked into mediocrity by abundance, reduced to claiming benefits, binging video games and eating too much pizza.
No one can lead a fulfilling life living like this. Man must achieve his full potential. A man with a fulfilling life does the modern equivalent of ancient man. Focus on continuously improving and learning. Fight for success and dominate. Go out and get what you want.
Contemplating the archetypal ideal man is a catalyst for change towards becoming an ideal human being. This may be a never-ending quest however you should still think of the qualities that make up the ideal person and apply these to your life.
Good archetypal figures within finance to contemplate are figureheads like Warren Buffet and JP Morgan. You can also find good examples of archetypes by analysing movies like the Wolf of Wall Street or TV series such as Billions.Self-RetreatIn today’s ever connected world; wealthy and successful people have complete abundance of options of where their next holiday retreat will be. However, what most people fail to realise is that there is also infinite abundance within the mind’s eye, and self-reflection is a brilliant tool to understanding, and exploring your inner world, which is ultimately you on the deepest level. Peace of mind and freedom comes from within, regularly travel inside your mind for 5 to 10 minutes a day.The Stripping Method.Scenarios and situations have many different layers. Picture them like an onion where each layer represents a characteristic of the situation but not the core issue itself. Practice stripping away the unimportant layers to find the core issue.
This can be applied to economic analysis for example, the price of a share may rise or fall due to a company reporting higher or lower profit than predicted. This may be because they reduced their advertising spending or because they lowered the quality of their production materials, or outsourced labour. But ultimately the reason for a change in the price of a share regardless of any other speculation is supply and demand factors within the market for shares.Practice MisfortuneIt is easy to get comfortable in today’s world, but comfort can keep you in bondage if you are afraid that something or someone might take it away. Practice what you fear and make yourself familiar with the worst-case scenario. This will help you become grateful and prevent a relentless pursuit of material things, including money.JournalJournaling is possibly the most important part of stoicism and morning and evening meditation is an essential part of it. Benjamin Franklin set a great example of this and is daily schedule is available online, this would include setting goals in the morning and then reflection in the evening. In the evening write down what you did good, what you did bad, and what you could do to improve.
Managers can take a lot from this but in a financial context, day traders can also take a lot from this. For example, for someone who trades the news, they can note down all the reports that day that will move the markets, and at the end of that day note down what they did good and bad, and what they need to do differently next time.
Philosophy is something that should be written down day by day and how you exercise yourself and mind. Writing down everything you’ve done in a day allows for self-examination and is a form of mindfulness and reflection.Negative VisualizationThis stoic exercise prepares you for the setbacks in life. By visualising what could go wrong and what could be taken from us, we are better prepared for when negative events happen.
Todays finance industry is in the business of risk. So this exercise can be applied greatly in evaluating or making risk models, by understanding what can go wrong and helping to prevent a failure of imagination. Doing this exercise can also help you to realise what may need insuring, hedging or backing up (in the case of data).Amor Fati: Love Everything That HappensAmor Fati, Latin for Love fate is possibly the best mindset you can have in life. Throughout the centuries great leaders have followed this motto, which I believe to be a factor in their life’s successes. It is the best mindset for any situation you face.
Treat each moment, no matter how challenging, as something to be embraced and not avoided. To not only be OK with it, but love it and be better for it. Then you will have truly achieved greatness for yourself.
Financial setbacks will happen, but you must be better for it, and learn from it.Cultivating PhilanthropyPhilanthropy is defined as the desire to promote the welfare of others.
People in high finance may often be under the illusion that in order to become a philanthropist, you need money. But in fact, this is not true. Anyone can become a philanthropist. It just requires the right attitude towards other people.
The best exercise to practice is an exercise whereby you bring everyone a sphere closer to yourself. For example, your family becomes a part of yourself, your friends to family, and strangers to friends.
To apply this to individuals in finance, if you consider the financial system as a whole as a part of yourself, then you are working in the best interests of the system and therefore all the stakeholders effected by it. Using this ethical understanding you are culminating a sense of philanthropy.Training Your Physical Self-ControlThis is basically level 2 of negative visualisation. By practicing purposefully enduring physical hardship and going without things you crave/enjoy; you are preparing yourself for when you must actually endure a struggle. Whether it be losing something or enduring physical hardship. This also trains us to desire things not under our control.
For example, for people working in finance, try to treat everything as a loan. Instead of saying ‘I have lost it’ say ‘I have given it back’. Learn not to grasp too tightly to ephemeral things.
Start small by practicing going for a run in the rain and slowly build it up. Also try reading a poker psychology book. If you smoke, you could take it an extra step and try quitting.ConclusionIndividuals whether they be hedge fund managers, investment bankers or traders on the London stock exchange will all benefit from the use of stoic exercises, regardless of if they do decide, or decide not to educate themselves on the general philosophy of stoicism in the future.
The reason for this is because stoicism has emerged as an ideal way of life and mind for the real, modern world. Ultimately what Stoicism is, is a series of reminders, tips and aids for living a prosperously.
Be a better, happier person. Be stronger in the face of adversity. Turns obstacles into opportunities. Keep your ego manageable and in perspective. And finally take whatever help you can get but understand it must also come from within.Stoic on financiers.References:Wikipedia, last edited on 22 July 2018. Stoicism [Online] < https://en.wikipedia.org/wiki/Stoicism > [Accessed 22 July 2018]
The daily stoic, 2018. What Is Stoicism? A Definition & 9 Stoic Exercises To Get You Started [Online] < https://dailystoic.com/what-is-stoicism-a-definition-3-stoic-exercises-to-get-you-started/ > [Accessed 22 July 2018]
By Emanuele Faja, 22 February 2016. 10 Insanely Useful Stoic Exercises [Online] < http://observer.com/2016/02/ten-insanely-useful-stoic-exercises/ > [Accessed 22 July 2018]
Marcus Aurelius. Unknown, likely before 850BC, The Meditations. London: Penguin Classics
Epictetus, 1537, The Discourses of Epictetus. London: Penguin Classics

4 Essential Steps for Your Skin Care Routine

The face and the facial skin is the first thing that people see. So when we leave our homes you want to present a clean, clear, beautiful looking face. The facial skin unlike other areas of skin on our body is always exposed to the environment and therefore is easily damaged through sun exposure, chemicals, toxins and pollutants. Taking care of our facial skin is very important not only to stay beautiful but also to avoid increased signs of aging, blemishes, or acne.Although, most skin care products and advertisements are directed at women, men should also have a daily facial skin care routine as well. Men’s facial skin is just as likely as women’s to become damaged, dirty, or acne ridden, therefore making sure you properly hydrate, and clean your facial skin is necessary. Most people have been using the same skin care routine since they were young. They found an over the counter face wash that has worked for them and they stuck with it. However, as we age our skin changes. You may need more than just your average face wash to keep up that clear, youthful looking skin.The best skin care routines involve 4 steps. Diligence and determination are needed to succeed with a great skin care routine. Most people consider just washing or cleansing their face of the daily dirt and grime their best effort to keep their facial skin in good condition. However, it’s the other crucial steps that will keep their skin looking young, vibrant, healthy and firm. Although, all four steps are necessary to keep our facial skin beautiful, 2 out of the four steps are not necessary on a daily basis.The four essential steps to the best skin care routines are cleansing, toning, exfoliating, and moisturizing. Cleansing and moisturizing the face should be done everyday in the morning and before you go to bed. This way the face stays fresh, clean and hydrated throughout the day as well as the night.Cleansing is the first step for proper skin care. Most people clean or wash their face at least one time a day. This step is imperative because it removes dirt, dust, grime, grease and extra oil from the skin. Wet the face and then use a good facial cleanser on both the face and the neck. Massage the cleanser gently into the skin in an upward motion. Then rinse the face with warm water and a soft washcloth or cotton wool. A water-based cleanser is the best for cleaning the face because you can avoid chemicals that may irritate the skin.Toning is the second step in a facial skin care routine. Toning is usually used in the form of toner pads or wipes. Facial toners are used to remove any traces of dirt, grease, or excess cleanser that has been left as residue on the face. Using a toner everyday is an option and some people may even leave it out completely if they feel their cleanser works well enough. A good rule of thumb is to use a toner in your morning facial routine but leave it out of your nighttime regiment.Exfoliation is a key part of any skin care regiment, however should not be done on a daily basis. Exfoliation should be done once a week at most to remove dead skin cells from the face. Although the body naturally sloughs off dead skin cells on its own, exfoliating helps to speed up the process. Dead skin cells can block pores and cause acne so removing these skin cells in a timely manner can reduce the appearance of acne. However, exfoliation can be harmful especially to the facial skin, if done too often. Normal skin cells are replenished every 3-4 weeks; therefore exfoliating new skin cells can damage the appearance of your skin.Lastly but most importantly is moisturizing. Moisturizing the skin is so important because it keeps our skin from drying out; causing wrinkles or cracks and keeps our skin radiant and glowing. Dry skin can be painful, itchy and unappealing to the eye. Skin cells need water to live; therefore overly dry skin can lead to increased skin cell death. Use a moisturizer specifically for the face. Apply your moisturizer when your skin is warm and damp because this is when the pores are open. Leave some moisturizer on the top of the skin to get the full effect for your skin. Moisturize any time the skin feels dry and after both morning and even skin care routines. Make sure your moisturizer doesn’t have any harmful chemicals, fragrances or dyes that can irritate the skin.Natural skin care products should be used for all skin care needs. Natural products avoid harsh chemicals and dyes that can irritate the skin and cause breakouts. Always use products based upon your own skin type. Test products on your forearm, earlobe or neck before you buy them. This way you can know if it will cause any irritation. Always remember to remove all makeup before starting your skin care routine. Don’t just wash away makeup; use proper make-up removers to completely clean the face of makeup residue. Remember to apply sunscreen if there is a possibility you will be out in the sun.

SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.