I read The Meditations by Marcus Aurelius recently. Here are some statements I found interesting, with possible applications to trading.

"Make for thyself a definition or description of the thing which is presented to thee, so as to see distinctly what kind of a thing it is in its substance, in its nudity, in its complete entirety, and tell thyself its proper name, and the names of the things of which it has been compounded, and into which it will be resolved. For nothing is so productive of elevation of mind as to be able to examine methodically and truly every object which is presented to thee in life, and always to look at things so as to see at the same time what kind of universe this is, and what kind of use everything performs in it, and what value everything has with reference to the whole, and what with reference to man …" Accurate observation and description are important aspects of the scientific method.

"As physicians have always their instruments and knives ready for cases which suddenly require their skill, so do thou have principles ready for the understanding of things divine and human …" You never know what the market might throw at you, so be prepared to act at all times. Similarly:

"The art of life is more like the wrestler's art than the dancer's, in respect of this, that it should stand ready and firm to meet onsets which are sudden and unexpected."

"A man should always have these two tools in readiness: the one, to do only whatever the reason of the ruling and legislating faculty may suggest for the use of men; the other, to change thy opinion, if there is any one at hand who sets thee right and moves thee from any opinion. But this change of opinion must proceed only from a certain persuasion, as of what is just or of common advantage, and the like, not because it appears pleasant or brings reputation." Don't get married to your position if circumstances change.

"How much trouble he avoids who does not look to see what his neighbor says or does or thinks, but only to what he does himself, that it may be just and pure … " Avoid tips. Or as Bacon said, "If you look at [somebody else's] prices or selections first, the line you come up with will be a sort of scrambling of his line and your line. Almost invariably, it will combine the weakest features of both."

"Occupy thyself with few things, says the philosopher, if thou wouldst be tranquil. But consider if it would not be better to say, 'Do what is necessary, and whatever the reason of the animal which is naturally social requires, and as it requires'. For this brings not only the tranquility which comes from doing well, but also that which comes from doing few things. For the greatest part of what we say and do being unnecessary, if a man takes this away, he will have more leisure and less uneasiness. Accordingly on every occasion a man should ask himself, 'Is this one of the unnecessary things?' Now a man should take away not only unnecessary acts but also unnecessary thoughts, for thus superfluous acts will not follow after." Focus on the few inputs that have the greatest impact on results. Specialize in a niche and get really good at it rather than trading soybeans one day, copper the next day, and bonds the following week.

"Always run to the short way; and the short way is the natural: accordingly say and do everything in conformity with the soundest reason. For such a purpose frees a man from trouble, and warfare, and all artifice and ostentatious display." Eighteen centuries before Zipf, a principle of least effort.

"I was once a fortunate man, but I lost it, I know not how"–a common lament among speculators. "But fortunate means that a man has assigned to himself a good fortune; and a good fortune is good disposition of the soul, good emotions, good actions."

"In the gymnastic exercises suppose that a man has torn thee with his nails, and by dashing against thy head has inflicted a wound. Well, we neither show any signs of vexation, nor are we offended, nor do we suspect him afterward as a treacherous fellow; and yet we are on our guard against him, not however as an enemy, nor yet with suspicion, but we quietly get out of his way. Something like this let thy behavior be in all the other parts of life; let us overlook many things in those who are like antagonists in the gymnasium. For it is in our power, as I said, to get out of the way, and to have no suspicion nor hatred." It is pointless to get angry with the market, but one must always be wary of the market.

"Frequently consider the connection of all things in the universe and their relation to one another. For in a manner all things are implicated with one another, and all in this way are friendly to one another; for one thing comes in order after another …" This is one of the major themes of the Daily Speculations website.

"Nature which governs the whole will soon change all things which thou seest, and out of their substance will make other things, and again other things from the substance of them, in order that the world may be ever new." The creative destruction of layoffs and bankruptcies frees resources from unproductive uses and perpetually renews the economy.

"But we ought to inquire, what kind of soul it was that Socrates possessed, and if he was able to be content with being just towards men and pious towards the gods, neither idly vexed on account of men's villainy, nor yet making himself a slave to any man's ignorance, nor receiving as strange anything that fell to his share out of the universal, nor enduring it as intolerable …" Don't waste energy on unproductive emotions.

Mark Candon adds:

Marcus Aurelius applies not only to the markets. I'm going to use it for this weekend's two-ball, best-ball golf tournament.

In selecting a partner, I've got a young man who is a terrific ball-striker with a tendency to beat himself. He plays much better with an older partner who will get in his face and tell him to pick a line, swing smooth, and accept the consequences of the shot.

Sometimes he gets so pessimistic that all I can do is try to string together enough pars to get his birdie-hunting head back in the game.

He needs a confidence boost before every four-foot putt. Ironically, if he doesn't have a couple of four-foot second putts in a round, he hasn't been aggressive enough on his first putts.

He never misses those four-footers if I encourage him beforehand. Oh, to be young again, fearless with the flat stick, and decisive on the read. 


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