Sophisticated versus Effective
- Posted by DynamicHedge
- on May 23rd, 2014
In any field where complexity is part of the discipline (think: finance, technology, etc.) there is a temptation to appear more sophisticated than others. More specifically, the idea is to appear to know the information that other people do not know and to have a certain cleverness about your approach and how you look at problems.
This is fine. The problem I see is that people in the process of discovery and learning are so self conscious about overcoming the bar of supposed sophistication that they focus on the optics before the substance. In other words, they try to acquire the appearance of sophistication before anything else.
First, learn the lingo of trading and investing so you can sound like you’ve been around for a while. Memorize the names of all the technical indicators, tickers, economic reports, and what they represent. Now figure out who the key players are and which ones are heroes and which are villains. If you’re not part of the debate how can you expect to be considered a pro? Now figure out how to communicate your new opinions. Support is strong, conviction is high, manipulation is obvious.
Now you sound all important and confident-like but what you missed is the once in a lifetime opportunity to look at the problem of the markets or technology, or whatever through true childlike eyes. Before your vision is tainted with all the baggage of the craft you had the best shot at cutting through all the bullshit.
Always remember that the word sophisticated has roots in “Sophism.” At one time, these ancient Sophist philosophers had a very bad reputation for being more concerned with winning arguments than arriving at truth.
We need a certain level of refinement to talk about the specialized problems of each industry but don’t let that garbage get in your way — especially if you’re just getting started. In other words, don’t be afraid to seek out something effective before you reach anything even resembling sophistication. Some of the best strategies are extremely simple. Low hanging fruit is still available because people overlook it. Don’t assume something won’t work before you test it out. Countless people never start because they are worried about being embarrassed or making “obvious” mistakes that will tip off the world to their amateur status. Or they latch on to a flawed ideology because it sounded complicated enough to work and the message was delivered with confidence of a sophist.
Don’t ever be afraid to think like a beginner again, especially if you’re already an expert.
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DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
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