Stop and go (The Financial Athlete #91)

Land animals move in a pattern of stop-and-go.

All ball sports are stop-and-go. So is hockey and surfing and weight lifting and badminton. Only the man who runs a marathon, or completes in a triathlon, or swims across the English Channel sees fit to move without stopping.

If day trading stocks were a sport, it would be an endurance sport. It’s go, go, go from the moment of the opening bell (or beforehand with premarket trades). The idea is to watch the tape during all trading hours and act upon the daily volatility.

If investing were a sport, it would be a stop-and-go sport. Here’s the stop-and-go cycle for investing in a particular stock:
1. Go: Do due diligence and buy if criteria met.
2. Stop.
3. Go: Updated due diligence. (Accumulate or hold or sell.)
4. Stop.
5. Repeat steps 3 and 4 until position closed.

I am biased toward stop-and-go activities. I believe it’s a healthier choice than endurance activities. For example, trading is more stressful than investing, while marathons are more taxing on the body than breaking a sweat playing ping pong. Ironically, an endurance sport is not a factor contributing to longevity of life, but the stop-and-go activity of strength training is.

“Of course, it is known that lean body mass is the best predictor of longevity once one becomes older. It is far more important to train your strength than to do aerobics (which wastes lean body mass) to live long.”
— Arthur De Vany

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: