Reading a recent review of the Richard Hofstader’s seminal work, Anti-intellectualism in American Life, I was struck by the following passage from the reviewer:
While Americans value experts and professionals, that is, the smart people we can use for practical, political, and mercantile ends, we are nonetheless wary of "disinterested intelligence, generalizing power, free speculation, fresh observation, creative novelty, radical criticism." An intellectual's mind, Hofstadter believes, is naturally poised between "playfulness and piety." It's a fine balance. An excess of playfulness "may lead to triviality, to the dissipation of intellectual energies on mere technique, to dilettantism, to the failure of creative effort.
This tension between “playfulness and piety” that Hofstader writes about is ever present in our business life. Witness the recent unravelling of Apple stock. While I want to avoid the pro/con investment arguments for the trade for the purposes of this column, it is an incontrovertible fact that the decline in Apple stock is directly related to the market’s view that the company has exhausted its creative energies.
Steve Jobs for all of his megalomania was a creative genius who spent most of his time “playing” in the Apple labs. As a result he sometimes was woefully wrong (“No one will need a 7 inch tablet”) but often he was spectacularly right. His last unfinished project was nothing less that the full reinvention of television. Who knows if he would have succeeded or not, but its clear that without him Apple is quickly turning into Microsoft. A corporatist, gradualist risk minimizing entity without a shred of fresh creativity. Tim Cook is a wonderful operations manager who can just as easily be plugged into McDonalds or UPS (Jobs’ withering comment to John Sculley was, “Do you want sell sugared water all your life or do you want to change the world?”) but he is clearly not up to the task, precisely because he is the type of “practical” American that does not have the “playful curiosity” necessary for a creative enterprise to succeed. In short he is in danger of becoming another Steve Ballmer.
So what does all of this have to do with trading? Quite a lot actually. Trading is probably one of the most creatively demanding disciplines in business. Not only must you learn to understand the world at the large, the markets in particular and your own self as you truly are, you must also constantly re-learn and re-invent your ideas in order to adapt to the ever changing market. I spent 90% of my time making trading mistakes, exploring, experimenting in effect “playing” with the market so that when my ideas make it to BK they are actually of some use to our trading. So if are doing the same and you think you are wasting time you are not. In trading as in life you need to play to pay.