Stoicism & Markets

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So, I read stoicism can make you better at your trading/investment game.

Stoicism is based on the principle of knowing what factors are under your control and what aren’t. Stoic is associated with human emotions and attitudes, and it’s all about domesticating them in its broader sense.

Stoic philosophy has been around since at least ancient Greece and is thought to have been developed by a guy named Zeno of Cyprus.

The wisdom of Stoicism is to control emotions both when it’s punishing favored positions as well as when the market rewards.

“Stoicism requires that financial advisors accept that they cannot control most of what happens and that it’s fruitless to worry about external events. Rather, Stoics focus all their energy and intelligence on things they can control.”

One thing that I understand from this is that you need to concentrate on what you do and focus on the things that are under your control for which you can adjust the outcomes. If there are outcomes because of the events that are not under your control, there should be acceptance.

The philosophy of Stoicism still lives on and is used by the rich, wealthy and powerful.

Got insights from this amazing read.

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Lately, I have been realizing the importance of psychology in the stock markets and how really it is one of the important aspects in defining a successful trader/investor.

Still, a lot to figure out on this topic. Do let me know what are your views on this and do you believe in this theory.

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Absolutely :+1:

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Hmm Philosophy, my guilty time sink. Let me quickly write my thoughts nobody asked or needs…

This is actually one of the reasons Stoicism was considered to be a rich man’s philosophy in ancient times. The “Big 3 Stoics”, were Seneca, the richest man in Rome in his time, Marcus Aurelius, the last good emperor of Rome and Epictetus, a former slave turned leader of the biggest stoic school in his later years.

It is debated whether this philosophy was founded by Zeno of Citium after his travels to India, or after having studied the prevalent Indian Schools of thought at the time. Even if we do not get into fact-finding, it is very clear that Stoicism is very similar to the Philosophy of “Detached Attachment” professed much earlier in the Bhagavad Gita. The principle of focusing on Karma without being burdened by attachment of the fruits of one’s labour for they are not in your control.

This particular philosophy in whatever name or form has always found takers because the central premise is so irresistible:
A. Animals are emotional creatures.
B.Humans are creatures of reason
C. This means that to be a superior Human, one should let reason rule over the domain of emotions.

In this respect Stoicism or any other similar personal philosophies are extremely helpful for one’s mental wellbeing if one can practice to shut out as much noise as they can and instead retreat within. Mental wellbeing is usually correlated with better decision making which in turn is correlated to better outcomes in life in general.

The Corollary to this would be of course, that there is a reason it was considered a richman’s philosophy and patronized by the well to do. It is because when you’ve been dealt a bad hand by life, or if you have dealt it to yourself. Emotions aren’t a part of your life, Emotions are your life. It would take a very strong-minded individual to see scarcity, pain, misery, struggle and failure on the daily, and accept what is and what is not in one’s control. Tell a person who has just lost half his capital to be “detachedly-attached” and it is quite likely, you will have something thrown at you in rage.

This angle is enshrined famously by Clint Eastwood in the movie " A Fistful of Dollars" when he says the Dialogue :

When a man’s got money in his pocket he begins to appreciate peace"

Or why even better that even in scriptures it took Vishnu himself to incarnate in his most superior form to tell the world this, it wasn’t a Human telling other Human to let go of emotional control.

So to wrap both sides up.

  1. Is Stoicism helpful in the Markets, or conduct of life in general. Absolutely yes.
  2. Is Stoicism really difficult to practice in situations that actually warrant its use. Absolutely yes.
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@MarginCaller Summed up Beautifully :raised_hands:

Though very informative of what you shared, the best part of it has to be this sentence, pretty much summing up alot of things once you earn bucks!

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Indeed, investing is all about managing your emotions. If you’ve incurred any loss instead of swearing to never invest again, accept the fact that something went wrong somewhere and figure out what it was and learn from it. Similarly, when you make huge returns, don’t go over board and invest all that you’ve got expecting similar results.

Investing is 9% theory, 1% execution, and 90% managing your emotions.

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This read helped my understanding to go one step ahead in learning about the stoic philosophy.

Check out: A Value Investor’s Guide To Stoicism | Macro Ops: Unparalleled Investing Research

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Agreed. Why buy and sell medals of freedom when God is our accountant : Agam - Shree Hari Stotram | Vishnu Mantra | Lyrical Sanskrit Mantra - YouTube

Some nice trading music, substitute it with anything you believe in and trading drastically improves.