What I Learned LOSING A MILLION DOLLARS - Jim Paul  ## Metadata - Author: **Jim Paul** - Full Title: What I Learned LOSING A MILLION DOLLARS - Category: #articles - URL: https://readwise.io/reader/document_raw_content/43046648 ## Highlights - The symbol of all relationships among such men, the moral symbol of respect for human beings, is the trader. We, who live by values, not by loot, are traders, both in manner and spirit. A trader is a man who earns what he gets, and does not give or take the undeserved. A trader does not ask to be paid for his failures, he does not ask to be loved for his flaws. A trader does not squander his body as fodder, or his soul as alms. Just as he does not give his work except in trade for material values, so he does not give the values of his spirit -- his love, his friendship, his esteem -- except in payment and in trade for human virtue, in payment for his own selfish pleasure, which he receives from men he can respect. The mystic parasites who have, throughout the ages, reviled the trader and held him in contempt, while honoring the beggars and the looters, have known the secret motive of their sneers: a trader is the entity they dread-- a man of justice. ([View Highlight](https://read.readwise.io/read/01hpbe6jyd0ac2vnfw735ayt2y)) - I didn't lose that kind of money simply because of a faulty method of analysis. That may have played a role, but something else was going on to keep me in a losing position even to the point where I went into debt to hold onto it. That something was the psychological distortion accompanying a series of successes, drawing my ego into the market position and setting me up for the disastrous loss. ([View Highlight](https://read.readwise.io/read/01hpbekjpc98dcm2kp0wrv0skp)) - Good judgment is usually the result of experience, and experience frequently the result of bad judgment. ([View Highlight](https://read.readwise.io/read/01hpbf1akaf0zyhmhshmgx8e78)) - Most people who think they are investing are speculating. And most people who think they are speculating are gambling ([View Highlight](https://read.readwise.io/read/01hpbfayc4zpng4xd6wk76305w)) - Risk is defined as the possibility of suffering a loss. ([View Highlight](https://read.readwise.io/read/01hpbfcnpnczpt4rqs8m19yfjv)) - The first psychological fallacy is the tendency to overvalue wagers involving a low probability of a high gain and to undervalue wagers involving a relatively high probability of low gain. ([View Highlight](https://read.readwise.io/read/01hpbhdngdn7v60am4y37x7h8r)) - The second is a tendency to interpret the probability of successive independent events as additive rather than multiplicative. ([View Highlight](https://read.readwise.io/read/01hpbhe3kvqy71eb9x02fznfze)) - The third is the belief that after a run of successes, a failure is mathematically inevitable, and vice versa. This is known as the Monte Carlo fallacy. ([View Highlight](https://read.readwise.io/read/01hpbhf9kvc4c66hs0g2p4hk9y)) - Fourth is the perception that the psychological probability of the occurrence of an event exceeds the mathematical probability if the event is favorable ([View Highlight](https://read.readwise.io/read/01hpbhfqhjbn8hfa35728gmqqt)) - Fifth is people's tendency to overestimate the frequency of the occurrence of infrequent events and to underestimate that of comparatively frequent ones, after observing a series of randomly generated events of different kinds with an interest in the frequency with which each kind of event occurs. ([View Highlight](https://read.readwise.io/read/01hpbhgp96ak2wxg2wbpvy2vhg)) - Sixth is people's tendency to confuse the occurrence of "unusual" events with the occurrence of low-probability events. For example, the remarkable feature of a bridge hand of thirteen spades is its apparent regularity, not its rarity (all hands are equally probable). ([View Highlight](https://read.readwise.io/read/01hpbhjbdmy4x8c6hew4gkh1a7)) - "Man is extremely uncomfortable with uncertainty. To deal with his discomfort, man tends to create a false sense of security by substituting certainty for uncertainty. It becomes the herd instinct. ([View Highlight](https://read.readwise.io/read/01hpcd1ft49m9m7v26yx4z4pzv))