As usual, just as things start going well again at work, I find a way to blow up. However, I still think I can recover nicely and this week will be crucial in deciding whether I can take a trip to Hong Kong in September. So everyone wish me luck in trading this week, especially those who want to see me in Hong Kong!
Among other things, a huge market has opened up downstairs right in the building. It's called Food Cellar & Co. and essentially is as big as a Whole Foods type place and has the sushi and hot foods sections as well. The best part is that they have an oven specifically for made-to-order pizzas and they're actually pretty good. This is a really good development since I was starting to get bored with the food options around here.
Friday, August 22, 2008
Quick trip to Boston
Was up in Boston last week for 4 days to attend a wedding. Congrats to Hao Yuen and Munyi!! During my time up there, I stayed for two nights at the Liberty hotel, which used to be a jail and is right next to Mass General Hospital. It's pretty classy, and houses one of the hottest bar/lounges in the city. I was very pleased with my stay.
Much of the trip was also spent eating, with way too much artery-clogging goodness. Wednesday started off with dinner at Hamersley's Bistro, with the always delicious roast chicken entree (practically the only time I order chicken at a restaurant) and a deliciously fatty calf's brain appetizer. Thursday lunch was spent at one of my favorite and very underappreciated sushi places in Boston, Sakurabana in the financial district. To the surprise of me and my friend, they had kobe beef sushi and tataki along with our usual preferred choices of bonito, suzuki, and hamachi belly.
Thursday dinner deserves a paragraph all by itself, as I spent over 3 and a half hours with my friend at Clio for the 14 course tasting menu which became 15 when we augmented an A5 kobe beef dish. It was a tasty and whimsical meal, with several fun courses and the iron chef experience with liquid nitrogen being used to create a sorbet tableside. My favorite highlights included:
A tomato water martini with basil oil, caper berry, and tomato popsicle.
Geoduck sashimi and BBQ, which was the first time I've had BBQed geoduck and that was nice.
A two hour slow-poached egg, which was special because when I asked whether it was sous-vide, they said it wasn't because it wasn't in a vaccuum bag but poached in the shell.
Two beautiful seared diver scallops with textures of tomato, rhubarb, and szechuan pepper.
Friday was mixed food-wise, as I had two lunches with the two Boston offices where I worked. After two slices of pizza I joined a whole bunch of guys for a disappointing (but not unexpectedly so) restaurant week lunch at the steakhouse named the Oak Room. Reminds me of the restaurant week disaster at Smith and Wollensky's from a while back. I'm not big on restaurant week to begin with but above all else I strongly strongly suggest not choosing a steakhouse to sample. Friday dinner was much nicer although it was basically a cow overdose. Bone marrow and oxtail for appetizer, a 30 oz bone-in rib eye for entree, and a shortrib mac n' cheese for a side which doubled as my dessert since it took me forever to finish it.
Much of the trip was also spent eating, with way too much artery-clogging goodness. Wednesday started off with dinner at Hamersley's Bistro, with the always delicious roast chicken entree (practically the only time I order chicken at a restaurant) and a deliciously fatty calf's brain appetizer. Thursday lunch was spent at one of my favorite and very underappreciated sushi places in Boston, Sakurabana in the financial district. To the surprise of me and my friend, they had kobe beef sushi and tataki along with our usual preferred choices of bonito, suzuki, and hamachi belly.
Thursday dinner deserves a paragraph all by itself, as I spent over 3 and a half hours with my friend at Clio for the 14 course tasting menu which became 15 when we augmented an A5 kobe beef dish. It was a tasty and whimsical meal, with several fun courses and the iron chef experience with liquid nitrogen being used to create a sorbet tableside. My favorite highlights included:
A tomato water martini with basil oil, caper berry, and tomato popsicle.
Geoduck sashimi and BBQ, which was the first time I've had BBQed geoduck and that was nice.
A two hour slow-poached egg, which was special because when I asked whether it was sous-vide, they said it wasn't because it wasn't in a vaccuum bag but poached in the shell.
Two beautiful seared diver scallops with textures of tomato, rhubarb, and szechuan pepper.
Friday was mixed food-wise, as I had two lunches with the two Boston offices where I worked. After two slices of pizza I joined a whole bunch of guys for a disappointing (but not unexpectedly so) restaurant week lunch at the steakhouse named the Oak Room. Reminds me of the restaurant week disaster at Smith and Wollensky's from a while back. I'm not big on restaurant week to begin with but above all else I strongly strongly suggest not choosing a steakhouse to sample. Friday dinner was much nicer although it was basically a cow overdose. Bone marrow and oxtail for appetizer, a 30 oz bone-in rib eye for entree, and a shortrib mac n' cheese for a side which doubled as my dessert since it took me forever to finish it.
Friday, August 1, 2008
Cognitive dissonance in trading
Just as I was on a little winning streak trading, I ended up doing something really stupid today. However, I did notice that this stupid trade that I made today is very similar to other stupid trades that I've made before and might be rooted in something psychologically ingrained in all of us.
Basically, the stupid trade looks like this. I have a premise/trade idea that is a combination of a short/medium term catalyst. After entering into the trade, I exit the trade for whatever reason (profit-taking, short term catalyst gone, time spent in trade, etc.). As the stock continues to move in the direction I had predicted, I now don't look for reasons to get back into the trade in that direction, but rather start to look for a fade move against it. This usually leads to much much pain.
An example: Let's say I buy a stock at $10. As it gets to $10.25, I notice there is a seller that keeps holding it down. Not only selling at $10.25, but coming low to $10.20, and seeming to return even after that one order is done. Seeing this new seller, I decide to exit the position, thinking supply/demand is saturated here. After a bit of time passes, either the market or just the stock proceeds to continue the move with speed and force. Before I can decide to join in again, the stock is at $10.50 and beyond. Now, however, I often find myself rationalizing a viewpoint to fade the move. Thoughts like "the stock has just made a 5% move" or "I think that's the seller coming back in" tend to just lead to a lot of pain as I keep getting squeezed through $11 and so on.
Now, obviously I traded like a moron. But I'm beginning to wonder whether part of what's behind the thought process comes from cognitive dissonance. I did a quick example of cognitive dissonance in this random daily thought from over a year ago: RDT Post
In short, cognitive dissonance refers to the mind's need for our thoughts and actions to be consistent (ie. not contradictory).
I don't recall the exact study, but I remember my professor describing a study about cognitive dissonance: Subjects were asked to do a task on a computer. The task was extremely boring and repetitive. After the completion of the task, subjects were paid either $1 or $20 for their participation. After receiving the payment, subjects were asked how much they enjoyed the task. According to the results, the subjects who received $1 on average responded to having enjoyed the task more than subjects who received $20. The authors' conclusions were that their minds experienced dissonance from performing such a boring task for only $1 that they resolved the contradiction by believing the task to be more enjoyable.
With regards to the trade, I'm wondering whether I start to think about reasons why the stock would come back instead of keep on going because it's consistent with me having exited my position earlier. Now, if cognitive dissonance was really such a factor, noone would sell their positions because it's contradictory to them buying it in the first place. However, in this case I had two contradicting beliefs already (the buy and the sell) and it seems that the most recent one had more sway over my thought process.
Oh well, whatever, maybe I'm just a moron who can't trade and am just whining. Have a good weekend everyone.
Basically, the stupid trade looks like this. I have a premise/trade idea that is a combination of a short/medium term catalyst. After entering into the trade, I exit the trade for whatever reason (profit-taking, short term catalyst gone, time spent in trade, etc.). As the stock continues to move in the direction I had predicted, I now don't look for reasons to get back into the trade in that direction, but rather start to look for a fade move against it. This usually leads to much much pain.
An example: Let's say I buy a stock at $10. As it gets to $10.25, I notice there is a seller that keeps holding it down. Not only selling at $10.25, but coming low to $10.20, and seeming to return even after that one order is done. Seeing this new seller, I decide to exit the position, thinking supply/demand is saturated here. After a bit of time passes, either the market or just the stock proceeds to continue the move with speed and force. Before I can decide to join in again, the stock is at $10.50 and beyond. Now, however, I often find myself rationalizing a viewpoint to fade the move. Thoughts like "the stock has just made a 5% move" or "I think that's the seller coming back in" tend to just lead to a lot of pain as I keep getting squeezed through $11 and so on.
Now, obviously I traded like a moron. But I'm beginning to wonder whether part of what's behind the thought process comes from cognitive dissonance. I did a quick example of cognitive dissonance in this random daily thought from over a year ago: RDT Post
In short, cognitive dissonance refers to the mind's need for our thoughts and actions to be consistent (ie. not contradictory).
I don't recall the exact study, but I remember my professor describing a study about cognitive dissonance: Subjects were asked to do a task on a computer. The task was extremely boring and repetitive. After the completion of the task, subjects were paid either $1 or $20 for their participation. After receiving the payment, subjects were asked how much they enjoyed the task. According to the results, the subjects who received $1 on average responded to having enjoyed the task more than subjects who received $20. The authors' conclusions were that their minds experienced dissonance from performing such a boring task for only $1 that they resolved the contradiction by believing the task to be more enjoyable.
With regards to the trade, I'm wondering whether I start to think about reasons why the stock would come back instead of keep on going because it's consistent with me having exited my position earlier. Now, if cognitive dissonance was really such a factor, noone would sell their positions because it's contradictory to them buying it in the first place. However, in this case I had two contradicting beliefs already (the buy and the sell) and it seems that the most recent one had more sway over my thought process.
Oh well, whatever, maybe I'm just a moron who can't trade and am just whining. Have a good weekend everyone.
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