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The 1997 crime drama show “The Sopranos” introduced us to Tony Soprano (played by James Gandolfini), an Italian American mobster who became the leader of a criminal organization while struggling with his own personal and family affairs.
Idolized by many, his unique style has even paved the way for human resources and management books.
This time, however, we’re looking into how Tony Soprano’s way of doing things can help you in the investment world.
Here are some of his most iconic quotes, and how they apply to the everyday investor.
Tony contemplated on how the best times have gone by and how he might have missed them.
We have all heard “Buy low, sell high” before, and we have all fought FOMO (fear of missing out Fear of Missing Out FOMO is an acronym that stands for the “Fear of Missing Out”. This captures the feeling that many retail traders feel with regards to volatile assets. The term is most commonly associated with cryptocurrencies though it can be extended to any type of investment instrument.Newer or less experienced investors are constantly dealing with psychological pressures when investing in assets. In the case of cryptocurrencies, what is in many ways an emergent field has given way to hysteria in some cases, with asset’s value rising seemingly overnight.Understanding FOMOFOMO can drive investors to do things like quickly selling other assets in order to have the opportunity to buy a particular asset that they are afraid of missing out on.Because cryptocurrency markets move so quickly, FOMO plays a huge role in the value of any cryptocurrency. Trading cryptocurrency can be an emotional rollercoaster. Indeed, cryptocoins rise and fall in value on a daily basis, experiencing volatility far in excess of more normalized assets such as stocks or currencies. Pegged as a purely psychological phenomena, FOMO captures many of the potential issues that traders must deal with when investing, be it cryptocurrencies or anything else.As a rule of thumb, it is important not to let emotions dictate all of your actions as a trader. Oftentimes, traders are not even aware that FOMO may be affecting their trading behavior.When approaching volatile assets, proper and sound decision making should always be utilized and in almost every case, there is always another chance at a future date to have an opportunity to invest. FOMO is an acronym that stands for the “Fear of Missing Out”. This captures the feeling that many retail traders feel with regards to volatile assets. The term is most commonly associated with cryptocurrencies though it can be extended to any type of investment instrument.Newer or less experienced investors are constantly dealing with psychological pressures when investing in assets. In the case of cryptocurrencies, what is in many ways an emergent field has given way to hysteria in some cases, with asset’s value rising seemingly overnight.Understanding FOMOFOMO can drive investors to do things like quickly selling other assets in order to have the opportunity to buy a particular asset that they are afraid of missing out on.Because cryptocurrency markets move so quickly, FOMO plays a huge role in the value of any cryptocurrency. Trading cryptocurrency can be an emotional rollercoaster. Indeed, cryptocoins rise and fall in value on a daily basis, experiencing volatility far in excess of more normalized assets such as stocks or currencies. Pegged as a purely psychological phenomena, FOMO captures many of the potential issues that traders must deal with when investing, be it cryptocurrencies or anything else.As a rule of thumb, it is important not to let emotions dictate all of your actions as a trader. Oftentimes, traders are not even aware that FOMO may be affecting their trading behavior.When approaching volatile assets, proper and sound decision making should always be utilized and in almost every case, there is always another chance at a future date to have an opportunity to invest. Read this Term) too.
Sometimes getting in early is key to an investment, other strategies will only try to capitalize on short price movements even if they do miss out on a big trend.
The key idea here is that you have to know your entry Entry In financial trading, an entry is simply the point at which a trader enters the market by either buying or selling a certain asset. Entries have two attributes, i.e. the price at which the trader entered, and the time at which the trader entered.There are a number of different types of entry in trading. The most common one is the Market Order. A market order is a manual order, which allows the trader to enter the market virtually immediately upon demand, at the current market price. A trader typically executes this by clicking on a buy or sell button on their broker’s platform, which displays the bid or ask price.The other two types of entries are pending orders, known as a stop entry order, where the trader buys above or sells below the current price, and a limit entry order, where the trader buys below or sells above the current price. Understanding Entries With regards to a stop entry order, there are two types, known as a buy stop entry order, and a sell stop entry order. A buy stop order is a pending order that is pre-set by the trader on a broker platform, which is a command to automatically buy an asset at a specific price above the current market price, should the price of that asset reach that point. A sell stop order is a command to automatically sell an asset at a specific price below the current market price, should the price of that asset reach that point. Concerning a limit entry order, again there are two types. First, a buy limit order is a pending order pre-set by the trader on a broker platform. This command automatically buys an asset at a specific price lower than the current market price, should the price of that asset reach that point. A sell limit order is a command to automatically sell an asset at a specific price higher than the current market price, should the price of that asset reach that point.With all pending entry orders, if price does not happen to reach the specified price, the orders are not executed. Some traders also apply a time limit for pending entry orders, so that if the price doesn’t reach a specified price within a certain time period, the order is cancelled after that time period expires. Pending entry orders are useful since a trader cannot be at one’s trading terminal at all times, so they are executed automatically in the trader’s absence. However, the disadvantage is that because the trader isn’t monitoring the market, there could be a nasty surprise upon arrival.TBC In financial trading, an entry is simply the point at which a trader enters the market by either buying or selling a certain asset. Entries have two attributes, i.e. the price at which the trader entered, and the time at which the trader entered.There are a number of different types of entry in trading. The most common one is the Market Order. A market order is a manual order, which allows the trader to enter the market virtually immediately upon demand, at the current market price. A trader typically executes this by clicking on a buy or sell button on their broker’s platform, which displays the bid or ask price.The other two types of entries are pending orders, known as a stop entry order, where the trader buys above or sells below the current price, and a limit entry order, where the trader buys below or sells above the current price. Understanding Entries With regards to a stop entry order, there are two types, known as a buy stop entry order, and a sell stop entry order. A buy stop order is a pending order that is pre-set by the trader on a broker platform, which is a command to automatically buy an asset at a specific price above the current market price, should the price of that asset reach that point. A sell stop order is a command to automatically sell an asset at a specific price below the current market price, should the price of that asset reach that point. Concerning a limit entry order, again there are two types. First, a buy limit order is a pending order pre-set by the trader on a broker platform. This command automatically buys an asset at a specific price lower than the current market price, should the price of that asset reach that point. A sell limit order is a command to automatically sell an asset at a specific price higher than the current market price, should the price of that asset reach that point.With all pending entry orders, if price does not happen to reach the specified price, the orders are not executed. Some traders also apply a time limit for pending entry orders, so that if the price doesn’t reach a specified price within a certain time period, the order is cancelled after that time period expires. Pending entry orders are useful since a trader cannot be at one’s trading terminal at all times, so they are executed automatically in the trader’s absence. However, the disadvantage is that because the trader isn’t monitoring the market, there could be a nasty surprise upon arrival.TBC Read this Term and exit points and be rigorous so that you won’t find yourself thinking that “the best is over”.
You will not want to exit your positions early and miss out on extra profits, the same way you most certainly won’t like to hold on to a losing investment for more than you should.
The Sopranos was a brilliant show in terms of plot and how it humanized even the worst characters.
Tony was the mob boss but in his therapy sessions, showed that he was self-aware, something which earned viewer’s respect. He actively decided to follow his family’s footsteps while fully knowing the extent of that decision.
Investors often blindly follow other investors, their gurus, their relatives, or friends’ “hot tip”, or even some TV show hosts.
The key issues are:
·Even if it sounds like a “sure thing”, don’t be lazy, don’t take anything at face value, think for yourself and always do your own due diligence.
·Sometimes you will find that the logical investment will be a contrarian one. And if your research is telling you that you have to swim against the current, then by all means do so.
Tony didn’t like the feeling of being tracked, so he completely avoided it.
There are bad days in the market and believe us when we say: the feeling of looking at a sea of red is bad.
So, if you have a long-term strategy, sometimes it’s best not to glue yourself to the screen daily and wonder why your investments are not going up as they should.
Tony was a big fan of the western star Gary Cooper.
In the show, however, Tony was on the opposite side of the spectrum as his explosive temper would put make him the polar opposite of the stoic western character.
When investing, you too will discover that your own feelings (like greed and fear) will try to mess with your strategy.
Reading up on trading psychology and curbing your own biases will greatly improve your trading performance.
You win some, you lose some, but the important thing is to learn from each trade and avoid getting all caught up in the past.
Keep that old saying in mind: past performance is no guarantee of future results.
Always be ready.
Tony Soprano dealt with violent criminals and opposite gangs.
He studied their every move and learned their way of dealing with things.
While his actions empowered him, they would also let him avoid traps or pitfalls.
He would never walk around unprepared and so shouldn’t you.
If you are dealing with investments, you should research as much as possible on both the companies you invest in, as well as the macroeconomic outlook and the very market’s conditions.
There are going to be bad days in the market but don’t let a bad run let you down.
Tony focused too much on the bad days to the point of him calling himself “King Midas in revers”, and that led to poor judgement at times.
As such, don’t focus on losses, learn from them instead. Another useful tip is keeping a trading journal and recording what you can, even the mood you were in when entering your positions.
Tony carried the burden of responsibility.
This quote highlights it and should serve as a reminder that you are the sole responsible for your investment decisions too so remember to act accordingly.
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