Dear Financial Voice Reader,
I was very fortunate that when I did my first ever launch for my hedge fund back in 2006 at the Royal Institute, Lord Noon (who sadly passed away this week) kindly attended. It is with sadness to note the passing of a business giant, mentor and role model who was always generous with his time and kind in his advice.My business has come a long way from back then, but I still recall how privileged I felt that he took the time to attend. I learnt a lot about him.But the markets teach you a lot about yourself too. What do the markets teach us about wealth every day? Well every day there are a hundred to a thousand trades some individuals make. In that time, unlike regular business deals, you learn a lot. You learn how you take failure, because you are not going to win every time. You learn how to control greed, because it is tempting to take large bets, but never a good idea.You learn about persistence paying off, because it is very easy to give up and forget even the most successful traders have losing trades, losing days, losing weeks, losing months and losing years.The markets teach us wealth is not made like in the lottery, in one minute, but by making small gains and adding to them every day. The markets teach us, if we don’t want big losses then we should take small ones quickly and not hide our heads in the sand. They teach us that there is a link between discipline and our success. They teach us to have a plan, and follow it and not be distracted.You will learn that risk and reward are difficult friends. That the more reward you want, the more risk you are given, and to make them asymmetric is what counts. You learn that risking the least to find out if you will be right and then adding to your success is a far more better strategy than any other. So there it is in the markets you learn about your fears of taking losses, whereas you should fear big losses, not any loss. You learn about your greed to rush money and by doing so taking unjustified risks, neglecting your discipline, relying on luck and then losing more money. You learn about self-control for gains tomorrow, in place of small victories that make you feel good today.Indeed, the markets are the best place to learn about yourself and business. All the lessons of wealth from the markets are the same as the ones you learn from the markets and the ones which made Lord Noon the success he was.Alpesh Patelwww.alpeshpatel.com/go
