5.3. CASE STUDY ON TRADING STRESS

In early May 2008, a new PM sent me an e-mail asking to meet with me to discuss job stress and how he could mitigate the emotional factors. When we sat down to talk, I asked him to tell me a little bit about his issues.

Kiev:

What has been stressful for you?

Stan:

This is my first year as a PM. I am finding it very stressful.

K:

In what way?

S:

Physically. I am trying to get to the gym. I am drinking less. My upper back is tense. I am more tired at the end of the day. I am cognizant of trying to be good at my job. Ninety-five percent of it is making unemotional decisions, but the stress is bringing emotion into my decision-making process. If I am down on a particular day, I am hesitant to make a move, to buy another stock, even if I have done all the necessary work to give me a lot of conviction. If one stock is blowing up on me, and I see an opportunity, say something is massively oversold or overbought, or a short squeeze that would be great to short, I second-guess myself.

K:

Your decision making isn't as crisp when you are feeling stressed out.

S:

I'm hesitant for fear I might be wrong. When I am wrong in my portfolio, I start to second-guess other decisions that I make. Probably the converse is true. When I am doing really well, I make mistakes the other way, feeling overconfident. Last year, as a check, I had my manager review all my positions. I had an excellent year last year [2007]. I might have been more inclined to make those decisions ...

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