How to Invest without Hope?

“Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and your greatest weakness.” – the Architect (Matrix Reloaded)

Was reading an article about the experience of a Futures Trader, and it made me think of the problem of Investor Bias. There always exist a bias where the investor is hopeful of investment returns. No one invests to lose money. Without the illusion/delusion of hope, there won’t be any investment at all.

Therefore lies the greatest strength and weakness of an investor. Their hope move them to take action to grow their money. But it is simultaneously their weakness because they will develop a blind spot to their investment of choice.

An investor can see their own bias only after the investment has failed. For the futures trader, it was a bet during the elections that went wrong. For some clients, it is the property that did not fulfill the marketing promise; it was the stock that did not turn out as the hot tip suggested; it was the fintech that did not have a mature legal protection for investors; China/India/FAANG/BRIC/Oil/Gold/Crypto was hot but now not; etc.

So the question becomes: How to lose hope while investing?… just kidding. How to remain our clarity while having hope? There are certain rules as to how the market works. We must be willing to put our hopes thru the brutal honesty of the marketplace. Whatever works, works. Whatever doesn’t work must be examined thoroughly as to the error of our assumptions and underlying view of our models.

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