in and sitting for a while, I realize 1 have enough time to take care of my lint-laden jacket. I walk
up to the counter and obtain the necessary tape.
There are about a dozen people in the small waiting room. A few moments later there is an
announcement for my flight: "Now boarding section one, seats one to eight." I pull out the
red, plastic, envelope-size boarding pass and notice that it is emblazoned with the number
11. "How quaint," I muse, "that they would board such a small flight in two sections." I sit
down and return to my lint-removal project.
I'm sitting there absentmindedly, picking lint off my jacket. Suddenly
I snap back into reality. I realize that it must be at least five or ten minutes since they called for
the boarding of the first group of passengers. I
look around the waiting area and, to my horror, I discover that it is virtually deserted. I jump up,
run through the doors to the airstrip, and see a
small plane with propellers whirring. "Wait!" I yell, waving my arms frantically as I rush toward
the plane. I see my whole precisely orchestrated trip—all four days, four states, and six interviews
of it—unraveling on the spot.
The airline attendant intercepts me. I flash my large red boarding
pass. "You're not going anywhere," he says firmly. At first I think he means that it's too late and
I missed the plane. But then he adds, "Your section will be leaving in five minutes." That's
when I learned that at the Martha's Vineyard airport "sections" refer to different planes! I slink
back to my seat. The moment of panic having passed, my sense of awareness returns, and I am
able to appreciate completely the full scope of my stupidity. The last time I felt that
embarrassed I had just asked an infrequently seen relative when she was "expecting," only to
learn subsequently that she had given birth two months earlier but had obviously retained a
good portion of the gained weight. Oops. "Okay, okay," you're saying, "a slightly amusing
anecdote—maybe— but what does this have to do with trading or investing?" Simply this: If
you're too busy picking the lint off your jacket, you're liable to miss the plane. In other words,
don't get so caught up in the details that you miss the big picture. Here are some examples of
market myopia:
> a trader who does exhaustive research trying to identify the most promising new
technology companies but overlooks the fact that a 70 percent price rise in the sector during
the past six months implies an unusually high-risk investment environment
> a trader who scrutinizes a company's financial statements and reports but fails to realize that
the company's soaring profits have been due to a single product whose future sales are
threatened by the imminent entry of new competitors
K a trader who is engrossed with finding better timing-entry methods but virtually ignores
such critical questions as: When and how will positions be exited? How will risk be
controlled?
All of these examples contain the same basic message: Maintain a whole-picture perspective.
Focus on the entire market and the sector, not just the individual stock. Be attentive to qualitative
factors, not just the available quantitative information. Develop a trading plan that encompasses all
the aspects of trading, not just the entry strategy.
