Avoid market losses, and death, by understanding change

Change is good

-Yes, for the Greek too

Research of all kinds shows living an ever-changing “lateral life” improves happiness, general health, keeps brain diseases at bay, increases longevity, not to mention makes you smarter, better at learning (higher brain plasticity potential) and more experienced and skillful with the ability to connect the dots between diverse knowledge areas.

In short, change is good.

Keep changing preemptively and purposefully. You will anyway, just not in a beneficial way without some nudging (albeit not by the state).


This post is mirrored at the Swedish site for financial information, TradeVenue


Break out of homeostasis

In addition, change happens all around you. And, changing willfully primes you for identifying and embracing that change – makes it easier to break out of all sorts of homeostasis, rather than be broken down by it, as Ludvig at SGM might put it.



School induced homeostasis in me at an early age

The worst thing school did to me, apart from generally waste my time, was to fool me into believing in constant truths (not least in physics).

I learned that a planet was a planet, not just by a temporary definition. I learned that the four forces were just that, always were, always will be – rather than a temporary convention to describe certain phenomena within a quite wide but still limited range. I learned time flowed forward and more or less constantly, except for in relativistic experiments.

Not least I learned time in itself was indivisible and continuous, though possibly with a lower limit of Planck time (5*10^-44s). It was never proposed that time might be something else altogether that we only approximate with something called time, and that it was just convenient in our current paradigm to treat time as, … well the time as we know it today. It was quite preposterous really, to assume and teach that the approximately just 75-year old view of time was correct and would stay constant forever! 

It has taken me forever to relearn that everything changes, not just scientific paradigms – everything. Earth’s rotation changes (the leap second), the moon’s distance to earth changes, the discovery of dark matter and dark energy might in retrospect be just one small of thousands of discoveries over the coming thousand millennia and forward.

Moral and ethics change, maybe even the rules of logic (!).

You and I change – faster than you think, but we are protected by the narrative “I” that always claim everything is coherent and as it should be, and not least constant going forward. The “I” is lying. Actually, the I doesn’t even know the “me”, but more about that some other time (or read Nörretrander’s amazing book yourself. I recommend it highly!).


TED radio hour chimes in on time, change and happiness


The other day, I was listening to the (recommended) TED Radio hour’s pod cast on time (Shifting Time, 19 june 2015). As always several TED talks and aspects of change and time were discussed, but one topic regarding aging, personality change and happiness struck me particularly:

Almost all people have the experience of having grown into their real self.

We all [almost all – no spam or trolling please!] think we are finally the real me. We know we changed a lot growing up and aging, perhaps can hardly even stand for some of our earlier opinions and actions, but now finally have reached a stable self plateau.

And yet, research shows that we keep changing, morphing into somebody else over the course of 10 years, over and over again. It seems we know we could change in either direction along an infinite number of parameters (extroversion, e.g.) but since the potential changes even out, we instinctively expect status quo to reign. It’s like approaching a T-crossing expecting to stay there :)


So, expect change, and manage it

-That’s really all I’m saying.

That goes for companies and stocks too.

stocks change on the exchange

The current stock price will change, the price trend will change, sales and profits will change, valuation multiples of those fundamentals will change, competition will change, client preferences and demand will change, costs will change. All mentioned factors for the company’s peers/competitors will change.

If Apple could emerge from the grave and crush Nokia, Apple too can be Appled. Facebook, which crushed MySpace to oblivion, can be Facebooked. And Tesla can…, well Tesla hasn’t actually done anything yet, not at a profit anyway. Remember Kodak? Or when Dell, HP or IBM was all the rage?

My distillation of best practices in the market boils down to just two things to consider:

Distillation of best practices on the stock market SpreZZaturian

1. How is it now?

2. What will or must change? (fundamentals, perception…)


Expecto patronum! Or, rather, happiness

If that HP reference flew right over your head, never mind. It’s not important.

-You can expect time to save you, to make you happy (unless you get sick)

Research shows a trough in perceived well-being around the age of 50 (coincidentally not far from my age; 43), followed by a strong trend of improvement, leading to new all time highs just 20 years later. The risk of depression follows a similar (inverted) path.

One theory of why is that older people get happier with age because they are relieved of the burden of thinking about the future; relieved of change (despite the fact that they are facing the biggest change of them all… -on the other hand into a state of absolute stasis)

What about lateral living and homeostasis – is it good to become older and happier, or is that actually dying? I’m inclined to think the latter.

So keep changing and keep living – hopefully long enough to live forever (AI, genetics, nanotechnology, stem cells, robotics and all that. Huge changes are coming sooner than you think [WaitButWhy]).

Charts of happiness (and depression risk) show a trough around my age and then ever improving numbers into old age.

I’m thus more or less at my worst now, although I’ve never had it better, I think.

Either I’m just born that way, thinking every year is better than the last. Or, just maybe, my instinctive focus on incremental change and growth (just one more, always be investing etc.) rather than a point target (becoming financially independent, rich, the best, buying a particular item or any such thing) is key. 

happiness and depression happiness


Conclusion and summary

Just take this with you, no new practices, no new habits:

Be prepared for change, never status quo

Embrace it. Manage it. Master it. Don’t just sit on your favorite stock because it has done well. Analyze it; imagine things changing. Don’t hold on to your job or partner for dear life or by complacency. Proactively manage for change. Expect it. Perhaps even prevent undesired change by changing something else.

This post, and all my articles going forward, will be posted in parallel at the Swedish site for financial information TradeVenue




  1. This was a really good post, Mikael.
    Furthermore, it was very readable and combined interesting information with just enough ”entertainment” to keep things easily digestible.

    You’re improving, or at least I think you are, in terms of your presentation and writing.

  2. Interesting regarding “plateau, old age, happiness”. I have not heard about this before, but it makes sense.

    However, I am always very skeptical regarding average measurement of happiness, depression, and life quality. Here are two theories I have, off the top of my head:

    1) Combination of Misweighting bias + curse of knowledge + hindsight bias messes up most older people’s memories, so that they remember their youth as either better or worse (than they really experienced it at the time).
    Then you could add contrast bias to that. . . if they have a good life now–and a sucky childhood–their progression is more evident, and they may experience more happiness. And vice versa, leading to nostalgia and depression.

    2) Coping mechanisms and/or adjusting one’s expectations tends to take place in this period you describe (ca between 35-50). If a person fails to achieve his/her ambitions in this time period, it is unlikely they will have the mental fortitude to keep those ambitions/visions alive for such a long time without them being reinforced. Thus, adjustment of expectation occurs over a few years. This may also explain “40-year old crises”.

    Just my 5 cent :)

    Also, I appreciate the mention.

    • Potential summary(?):
      Most people base assumptions on what’s in front of them. Astute people look at underlying principles, building their assumptions & adapting from there.

      I’ve found it the case that the more you put in, the more comes out. Thus, if you’re going to be a lemming and do what everyone else seems to be doing, you’re going to jump from trend to trend.

      The best thing I have found is to get deeeeeeeeep into something. Anything. Do a task well, and you’ll soon discover what you like – and dislike – doing. This gives you indication of what you’ll be good at & where money comes from (expertise).

      I have no stock trading experience, but I see that the more you know an industry (IE how well some companies work, how well they’re run etc), you can begin to formulate ideas as to what companies are worth. This gives you the ability to identify companies likely to grow in the next 1-3 yrs.

      Of course, most people only operate on a weekly basis at best. Woe unto them. The best people see things for what they are, work on ideas in their own mind, and move forward. Maybe the closer to retirement you get, the less you care, because you can just sit out your days & relax.

      • lol woops seems this is a reply to Ludvig! It’s meant to be its own post

      • Yes, and still…

        Identifying growth for 1-3 years might make it possible to run with a trend, but the stock is often already overpriced when you get in anyway. Growth companies often get at least twice overvalued, sometimes 10x or more. At least if it’s a bull market.

        The really good investments are always done in bear markets or before the start of bull markets, when despair and doubt is abound. Dare trust your judgment then, finding growth where most people just see more losses coming, and you’ll be rewarded by not only the growth in itself but increased valuation multiples as well.

        • Perfect advice, I value it greatly. I wish I could reciprocate but alas I am but inexperienced slush in the cold world of high-finance.

    • More like your 1000 USD. Great comment. It’s a good thing I don’t carry knowledge about all those biases around, or I wouldn’t be able to write one single paragraph.

  3. Hmm, it seems that the most shitty years are just in front of me ;)
    “Be prepared for change, never status quo” – that’s a really apt sentence to incorporate into your personal philosophy. Like every other truth. Denying the reality is the biggest source of discomfort and suffering.

    • Change often hurts, but it’s necessary. Better be prepared than ambushed.

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