Takeaways from Gone With the Wind

In the movie "Gone with the Wind" the heroine Scarlett asks Rhett Butler, when he is about to leave her "Where shall I go? What shall I do?" It is then that Rhett says his now very very famous line "Frankly, my dear, I don't give a damn" Most people assume that the movie ends there. But that is not the end of the movie. The end is when Scarlett, who has already lost her one true love, Ashley, who has also lost her son and the only man who truly loved her, Rhett, worries about her future and then comes to the conclusion that there is still hope. She decides to return to her home Tara and says "Tara. Home!. I'll go home and I'll think of some way to get him back! After all, tomorrow is another day"

Her optimism is infectious and it is this last scene which gives the film epic its feel good ending. Optimism about the future and confidence in oneself, despite recent experiences to the contrary, is ingrained in human nature. It is precisely these traits that make human life endurable despite the vagaries of the human condition and the inevitable miseries that every human life is subjected to.

These ingrained impulses are also the key reason why this market survives! How else do you think we get new traders entering the market to try their hand at it? Why else do traders keep holding on to a losing position if not for the hope and optimism that it will eventually turn in their favor? Why else do you think new traders believe that they can make money when many around them are failing to do that? Finally, isn't it true that a trader who has learnt to control this involuntary impulses and therefore a trader who sees the market for what it is - a place where extreme risk control and systematic processes are better than human thought processes-can benefit from this human fraility and make money?

I am not sure whether I have learned to control all my impulses. The safest thing to do therefore is to take all decision related to the market out of my imperfect hands and leave it to a system, however imperfect. At least the system will not be swayed by emotions! Once I have done that I allow myself to be optimistic about my chances in the market. I allow myself the confidence and the hope that eventually my system and I will make money out of the fallacies of the other players in this zero sum game.

Having said all this, my system remains short. I am tempted to buy because I think that the market has come down too much. But the system demands that remain short on the Nifty and cut my short position and go long only above 4984.