Why Our Trading Knowledge Is (Mostly) Worthless

“An investment in knowledge always pays the best interest.”

― Benjamin Franklin

Since the dawn of time, sages, wise men, and Yoda have extolled the virtues of living a life dedicated to its pursuit.

The ancient Greeks considered it one of the four main branches of philosophy, along with ethics, logic, and metaphysics.

It’s a common theme running through Christianity, Hinduism, Judaism, and Islam - often translated as “The Knowing” - the scriptures are littered with protagonists who, claiming to possess it, wear it like a holy vestment.

Sir Francis Bacon first articulated its value prop, Thomas Hobbes made it a core tenant of his epic treatise Leviathan, and Emerson asserted that without it, man could have no power.

The “it” in question is knowledge.

Spoiler alert. Knowledge is overrated.

I have every ounce of knowledge needed to avoid getting into arguments with my wife.

Give her a call if you want to know how that’s going.

There’s not a website, tweet, video, book, TikTok, Fleet, Reel, Story, or yet undiscovered Sanskrit tablet that can give me any more knowledge about how to eat healthy.

If you find something new, send it to me and I’ll check it out, right after I’m done killing two crunchtadas, a crispy chicken burrito, and a fiesta pack at Del Taco.

I spent the first 10-years of my trading career soaking up the best knowledge I could find.

I even made a list.

And at the risk of sounding immodest, I have all the knowledge I’ll ever need to consistently extract money out of the market - like an MF’ing ATM.

But that didn’t stop me from turning an early profit last week into a scratch by Friday’s close, courtesy of my insistence that I force trades into a choppy tape - the trading equivalent of death by a thousand cuts.

Here’s a look at what the market did to my positions.

Want to know how worthless knowledge is by itself?

According to a 2020 study of cancer survivors warned about how alcohol consumption could inhibit their recovery - and even spur a recurrence of their disease – 56.5% continued to drink, 34.9% exceeded moderate drinking limits, and 21% engaged in binge drinking.

It probably took me five years to learn everything I needed to know to become a successful trader.

Thanks to technology, kids today can do it in six months - or less.

After that, it’s diminishing returns.

It’s been said that 90% of success in life is just showing up.

In the market, it doesn’t count for that much, but I’ll wager it takes up 50% of the cause.

I’m not going to give you a cute little package - conveniently adding up to 100% - on the rest, but I can give you an approximation of what fills the gap.

Meditation and mindfulness is more important than RSIs, MACDs, VWAP, or the indicator du jour.

Eating right and getting enough sleep is better than inside information.

Having charts updated and alerts in place before the market opens runs rings around chasing breaking news.

A few sessions on the couch yields more positive results than any scan, algo, or backtesting can.

Journaling, blogging, and writing about your trading every day – in a fearless and honest way – trumps getting into Twitter wars about whether XYZ stock is a buy/sell.

Successful trading is about being human and accepting the frailties, limitations, and blind spots that come with the condition.

Acquiring trading knowledge isn’t difficult. Recognizing when you have enough, and putting it to use on a consistent basis, is the hard part.

Once you have it, better to spend your time surrounding yourself with a community of like-minded folks who will help you – as you help them – to reinforce that which you already know, than to continue to pursue the false gods of perfect, but ineffectual knowledge.

“Knowledge is of no value unless you put it into practice.”

—Anton Chekhov

——————————

MARKET REVIEW, TRADING, & INVESTING

——————————

Please read the disclosures at the bottom of this page.


Lund Loop Trading Lessons Library


The Lund Loop Trading Lessons Library is an archive of videos and articles dedicated to helping you become a better trader and investor.

You can access the library here.


Market Overview Video: 7-2-21


After clicking the video below, make sure to maximize it and change the definition to 1080HD.


Weekly Stock Watchlists


You can find this week’s “Potential Setups” list here.

You can find this week’s “Keep An Eye On These” list here.


Lund Loop Discord


Daily updated charts are here.


Deconstructing a Trade: The Swing Trade Mindset


After clicking the video below, make sure to maximize it and change the definition to 1080HD.


Markets, Trading & Finance Links


-Some tips for getting around paywalls.-

  • Goal setting for traders can be problematic. TraderFeed

  • 16 unbelievable facts about the stock market. A Wealth of Common Sense

  • We’ve entered into an era of speculation, and you better adapt. Morningstar

  • More on that court decision that sent Facebook stock rocketing higher on Monday. Yahoo Finance

  • When a 59% annual return is just not enough. WSJ

  • Investors should prepare to be disappointed with their returns going forward. The Irrelevant Investor

  • If you’re in the market for a new car it might be best to approach the current market like a trader. The Big Picture

  • 7 reasons to be optimistic about the economy going forward. Slate

  • “You can’t upgrade and downgrade every day.” Analysts have given up on meme stocks. MarketWatch

  • In the wake of the recent Supreme Court decision, colleges are trying to figure out how they can help their athletes monetize their careers. WSJ

  • And somewhat related, Covid – and mega-investment funds – are changing the way musicians monetize their music. NYT

  • What’s sketchier than an alt-coin? An alt-coin attached to a celebrity influencer. Mashable

  • A Q&A with Katie Haun, the principal in Andreessen Horowitz’s new $2.2 billion crypto fund. NYT

  • Will China’s crackdown on Bitcoin actually be bullish for crypto in the long run? AVC

  • Vegas is officially back as the strip welcomes its first mega-casino in a decade. WSJ

  • The story of how Peter Thiel managed to amass $5 billion in his tax-free Roth IRA. Pro Publica

  • The California to Austin exodus is not a juggernaut – and it’s starting to show up in prices. San Francisco Chronicle

  • The economics of dollar stores. The Hustle


It’s Good, It’s Good


-Some tips for getting around paywalls.-

It’s an annual occurrence in SoCal around the 4th of July, police find a massive cache of illegal fireworks and dispose of it. This year it didn’t go so well.

Full story. Los Angeles Times


  • Nyjah Huston may be the best street skater EVER. Do yourself a favor and block 10-minutes to watch his absolutely harrowing highlight reel. YouTube

  • This is fun: The most pleasant places to live in America. Kellegous

  • It’s estimated that 95% of the world’s fish population lives in a deep layer of the ocean we know almost nothing about. Welcome to the world of “dark fish.” Kottke.org

  • The cure to 92% of all hiccup attacks. The Guardian

  • Do things that scare you. Hunter Walk

  • One of the biggest casualties of Covid-19 has been old-school craft beer bars. Paste Magazine

  • The military has been accused of being “too woke.” They disagree. Politico

  • Even former allies of California’s homeless are getting fed up with the situation. Yahoo News

  • And in a surprise move, the Los Angeles city council is taking action. Los Angeles Times

  • It really is out of control. YouTube

  • This is a mashup I never saw coming. Many in California’s yoga, wellness, and spirituality community are gravitating toward Qanon. Los Angeles Times

  • The unlikely survival of a 1,081-year-old tree. NYT

  • The Flintstones House lawsuit has been settled. Thank God! The Guardian

  • A trillion is sooooo big. NYT

  • Last week Oakland’s city council voted to divert $18 million from the police budget. [Cue irony gods]. This week, Oakland’s Chief of Violence Prevention was held up by armed robbers as he was doing an interview outside City Hall. 😒 Mercury News

  • How do you preserve online information if the Internet by nature is ephemeral? The Atlantic

  • In pictures: Audrey Hepburn and her pet dear Pippin. Vintage Everyday


The Week in Tweets












———————————

Thanks for reading this week’s edition of The Lund Loop.

I want to hear your opinion on these or any other topics you see fit to pontificate on.

So drop me a line.

If you arrived here by accident, happenstance, or magic, I’m currently offering a special 4th of July deal - 20% off an annual Lund Loop subscription.

That comes out to just $6.67 a month.

Just one successful trade could pay for 47 years worth of the Lund Loop, so click that blue button below to get in on this limited-time offer.

Get 20% off for 1 year

And if you really like The Lund Loop, why not purchase a subscription for a friend, loved one, or division of co-workers?

Give a gift subscription

Talk to you soon,

-B

P.S. It should go without saying - but I’ll say it anyway - all opinions expressed in The Lund Loop are my own personal opinions and don’t reflect the views of my employer, any associated entities, or other organizations I’m associated with.

Nothing written, expressed, or implied here should be looked at as investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own diligence.