When Your Best Is Not Good Enough: The James Harrison School of Investing

I heard about this Instagram post on CNBC of all places. The article was brief and just reported the news. I was expecting some commentary directly linking this to financial markets. Seeing none, I will make my own link here.

James Harrison is a linebacker in America’s National Football League. He plays for a team named the Pittsburgh Steelers in what is called the central division of the American Football Conference. It is historically known for tough, bruising defenses and extremely bitter rivalries.

Source: NFL

Harrison’s displeasure struck a chord because I was just reading a few more pages today of a book on demographics by Paul Taylor from the Pew Research Center that I am eager to finish because I think it will provide a lot of tradeable and investable insight: “The Next America: Boomers, Millennials, and the Looming Generational Showdown.” Here is a key quote generalizing about Millennials (emphasis mine):

“The Millennials’ two seemingly incompatible characteristics—their slow walk to adulthood and their unshaken confidence in the future—are their most distinctive traits. Despite inheriting the worst economy since the Great Depression, despite rates of youth un-and underemployment that are the highest since the government began keeping such records, despite the growing albatross of student loan debt, and despite not being able to think about starting a family of their own, Millennials are America’s most stubborn optimists. They have a self-confidence born of coddling parents and everyone-gets-a-trophy coaches. They have a look-at-me elan that comes from being humankind’s first generation of digital natives (before them, nobody knew that the whole world wanted to see your funny cat photos). And they have the invincibility of youth.”

I have often heard demographers and social commentators complain about how Boomers have coddled their Millennial children into an under-achieving, delayed adulthood. The quote above seems to imply that the coddling and “participation trophies” have generated a firmly rooted self-confidence. So which is it?

Well, from a trading point of view, a self-confidence born from a sense that doing your best will bring you great rewards is a quick and surefire way to lose a lot of money, very quickly. As Harrison says, sometimes, doing your best is just not good enough. In trading, this happens because there are a LOT of people doing their best in the market, many of them working the opposite side of the trade or investment you think is a sure winner. In Harrison’s parlance, your best can and will fail; you have to be able to learn from that experience and strive to expand what “your best” means. Crying and whining will fall on deaf ears; the market simply does not care about your feelings!

I see some of this “crying and whining” on social media venues for traders and investors. These are the folks who come to a stock with a pre-conceived notion that because they have done the homework, examined the chart, and/or examined the financials from top to bottom and front to back that the market should reward them for their knowledge. Almost like cause and effect. The market should reward their participation by demonstrating their correctness with the stock moving in the desired direction. Woe to anyone who has an opposing opinion! The opposing opinion on the STOCK might as well be a personal attack on the PERSON. After all, what else could negative feedback mean to a person who has grown accustomed to congratulations just for showing up, right?

This attitude is not healthy in general and definitely unbecoming for traders and investors. Social media can be so powerful because it can expose you to opinions and viewpoints you would never have accessed otherwise. If being wrong on a trade or investment does not put your best into the proper context, social media sure can help if viewed with the right lens.

So, kudos to Harrison for standing up for excellence and the continuous drive for self-improvement. His sons should be all the better for it in the long-run. Harrison knows all too well that the Steelers do not pay him just for showing up and doing his best. Harrison earns his keep by proving his team has no better alternatives. His best is only as good as the gap between him and the skills of the hungry guy on the bench wishing he could get a chance at linebacker…

Be careful out there!

Full disclosure: no positions (and not a Pittsburgh Steelers fan unless I can snatch Antonio Brown as a wide receiver for my fantasy football leagues)