Antagonistic behavior in all situations is an action that seeks a disproportionately greater reaction in order to escalate a situation to a resolution. At it's essence, antagonistic behavior is a response to emotional pain. Hurt people seek to hurt people.
Antagonistic behavior as it relates to portfolio management is an often overlooked component of structuring and a modifying a portfolio of investments over the long-term. Of course, antagonism as it relates to a financial instrument comes in the form of a loss of capital that at the same time causes an erosion in the underlying thesis for remaining invested. The thesis often times remains identical as the point of initial investment. However, the erosion of the thesis is a symptom of persistent antagonism seeking a greater reaction from the investor. That greater reaction comes in the form of varying emotional stages that eventually completely alter the framework of an investment due to the pain of persistent antagonism emotionally exhausting the investor while seeking to escalate the situation to a resolution.
Of course, labels of investment behavior will often times dictate how one reacts to antagonism. If you are, for example, a trend follower, antagonistic behavior won't be labeled as such until a technical breach takes place that invalidates the trend. If you are, for example, a value investor, antagonistic behavior is initially thought of as an opportunity to increase a position. Antagonism, for a value investor, only enters the picture when a pain threshold has been breached that alters his or her perception.
As long as the antagonistic behavior can be defined within a system of labeling the antagonism as falling within a statistical framework for acceptable results then the behavior can be ignored. Once the system of labeling no longer applies due to the extent of the losses, antagonistic portfolio behavior is very suddenly thrust onto the consciousness of an investor causing a greater reaction, typically escalating into a prompt exit regardless of the underlying fundamentals or deviation from the initial thesis. The only thing that has changed is that the antagonism no longer is confined within a definable framework.
It can be argued then that labeling oneself is detrimental as it only inhibits the ability to judge antagonism. In other words, labels of growth, value, trend follower etc. are only a means of accepting antagonism as being a necessary component within the framework of the investment.
Antagonistic behavior within a portfolio should then be judged as what it is from the outset. Whenever a portfolio position is moving against an investor, it must be seen as an action that seeks to create a disproportionately greater reaction from the investor in order to reach a resolution.
This act of seeking a resolution as a result of antagonistic portfolio behavior is a foundational problem within the framework of every system of investment created. It allows for markets to utilize antagonistic portfolio behavior in order seek resolutions prematurely. The labels investors assign further accelerates this process as they give the markets a confined framework from which any deviation causes antagonistic behavior to lead to a premature resolution.
While instant, abundant liquidity is the hallmark of developed financial markets, compulsive reliance on price data for daily validation of an investment thesis is an impracticable, often times conflicting component of a successful investment strategy as it only serves as an arena for antagonistic portfolio behavior aimed at its attendees.
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