Much like anything else in finance, every tool for investment whether fundamental, technical or emotional has its uses and a season for that use. Fear is not always a terrible trait. It could have saved investors greatly in 2007 - 2008. Greed is not terrible either. I know many greedy investors who have done extremely well in the markets. There are no Ten Commandments for success in finance. It makes for a good title to sell books to the hopeful (another trait that can be used sparingly), but the fact of the matter is that the fluidity that is investing will never allow single point of fundamental, technical or emotional success to have an uninterrupted, peaceful existence.
Caring is an endearing trait that is celebrated for good reason. That is perhaps why so many individuals will bring the act of caring into perpetuity with them to the realm of investing. It simply doesn't transfer. Investing when approached properly is a simple game of making decisions that have a positive expected value over the long-term. The only way to gain knowledge as to what constitutes positive expected value is through experience. Those who are consistently successful in the markets after 10, 15 or 20 years, have naturally found a path towards decisions that have a positive expected value, whether they realize it or not. Most will chalk it up to dozens of different skills they have gathered. But the essence of what they are doing is good decision making on a consistent basis.
The problem with consistently caring, as so many individuals believe it is their duty to do, is that it leads to various peripheral evils that will eventually all gather together like a Chinese sandstorm, collapsing an investors ability to make decisions that have a positive expected value. Those peripheral evils primarily have to do with over-thinking situations that require no thinking at all.
When you strip away everything and I mean EVERYTHING from the markets, the situations that an investor faces become abundantly clear. What investors so often fail to realize is that 95% of the price movement that is witnessed on a yearly basis does not require judgement of any sort. It simply IS. This means that out of the 250 or so trading days that we experience each year only 12 of those days (keep in mind, I am talking about investors, not traders here) require our effort or judgement. The rest of time the markets are simply filling space through random movements that are meant for those who care in perpetuity, which is the vast majority. After all, entire companies have been built on the back of constant analysis or interpretation of events whether media or research driven. The Wall Street machine, if you will.
It is those 238 other days that bring misery because an investor will carry with him the weight of analysis into a situation that requires nothing of that investor. There is no analysis needed when nothing is there. And the majority of the time there is nothing in the everyday price movement of a stock. Only what an investor wants there to be based on past experiences and emotions. As Warren Buffett put it, "over the short-run the market is a voting machine, but in the long run it acts as a weighing machine."
Those who care too much in 2014 will end up as the dregs of Wall Street in the years ahead. There is no thought needed in an environment of digestion, which is what we are in, at present. The gains of the past several years have come back home in the form of a sideways market. That is really all there is to it.
In the meantime, the caring culture of Wall Street will attempt to misinterpret every event surrounding this sideways market as a sign of an impending cataclysm. And that is exactly what you get when a culture of over-analysis meets the emptiness that comes with random movements that require no analysis at all.
