Dual skills of a great investor or trader

No one can become a greater investor or trader without having this dual skilled mentality. I have not seen one great investor who could out beat anyone with just single knowledge of how the markets work. While a robust trading system is needed for all participants in the markets, however robust, it cannot work without an equally sharp knowledge in another area. With just a robust trading system, you cannot expect to beat anybody because every long term participant in the markets has an equally robust or far more robust trading system than yours. The only competitive edge comes out of an investor or trader is his specialty knowledge in a second area. These areas can be very broad and by far not limited to the following – business strategy, economics, politics, psychology, or even philosophy.

As you can probably see, these are very dynamic skills that cannot be rationalised into a computer function. If these skills can be packaged and sold as a product then they will lose their elusiveness. This is actually quite obvious. Look at those who use algorithmic trading systems, how many of them are actually the brains behind the software? The software is just packaged and sold and resold to businesses everywhere. Once the market becomes saturated with this system, and the people who paid millions to buy this will not know a thing about recreating another more robust system, things will just blow up. This is not very hard to predict, which works the same way as technical analysis.

Over the existence of human history, people tried hard to simplify workings of everything. It worked for mechanical procedures like mass production on assembly lines or arithmetics on calculators. But the human mind is intelligent and a computer is not. The computer does not think for itself, it merely outputs what the engineers have put in. People who tried to simplify these dynamics skills into monotonous brain-dead functions will only end up dead in the long term, at least for their end users. In other words, you cannot just not think to expect to beat other people. You cannot just not think and expect other people to work for you.

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