The Art of Trading: A Creative Journey Through the World of Investing
Amidst a rapidly transforming financial landscape, the need for original thinking has never been greater. The realm of stock trading and the world of art and design may appear to be poles apart, but when they intersect, it creates a platform for forward-thinking individuals to explore and capitalize on opportunities that transcend conventional boundaries.
In 2008, I graduated with a Bachelor of Fine Arts degree, only to find myself facing a daunting job market, which I later discovered was due to one of the most severe financial crises in history. Despite the challenging environment, I pursued my artistic passion, simultaneously launching my own game company, which provided me with significant insights into the financial world.
The traditional approach to value investing, rooted in analyzing a company's fundamentals such as revenue, price-to-earning ratio, and other corporate metrics, has become extremely competitive yielding less and less attractive rewards that it was beginning to evolve. More and more traders begin to learn to assess a company's worth based on its product — a perspective more common among retail traders. Even with transparent, universal information, the competitive edge belonged to those who could interpret it creatively.
During my eight-year journey as a trader, I've navigated more than 3,000 trades, each serving as stepping stones towards a cumulative return exceeding 10,000% earning over $3 million - an enriching exploration into the resilience, determination, and creative disruption required to navigate the financial sphere. This perspective doesn't overshadow the importance of mastering the financial fundamentals. Just as an artist must grasp the fundamental principles of composition to create a masterpiece, a trader must understand traditional financial metrics to sketch their unique investment strategies.
The financial landscape has witnessed a significant transformation in recent years, with the Federal Reserve's quantitative easing initiatives encouraging a surge of retail traders leading to more emotion-driven markets. Due to that reason, stocks that are detached from fundamentals are becoming impossible to be accurately assessed with traditional models and require new methodologies to properly analyze and project future values. With the rise of social media over the years, news, and research on the internet has leveled the playing field, empowering everyone, not just the privileged, with crucial market information in real-time. Due to that reason, an artist's perspective provides a uniquely human-centric and innovative approach to trading, providing a valuable counterbalance to the rational and logical aspects of the industry. Let's explore this more in-depth:
Pattern Recognition
Reflecting on my trading history, I've often been asked why, at certain moments, I've chosen to buy a certain stock at a particular time. While I can offer rational and strategic reasoning, I can never fully articulate the underlying drive that makes my final decision. Upon introspection, I've come to recognize that I often find myself constantly staring and trying to visually complete the missing part of a chart as I would as an artist, and it happened automatically, instinctively, that I never picked up until many years later.
As artists, we spend countless hours observing and capturing the natural world, often deconstructing complex scenes into fundamental geometric shapes and patterns. This immersion into the rhythm of the natural world imparts a profound understanding of how humans operate, a perspective that can seamlessly transition into recognizing and interpreting patterns in market data.
Understanding nature's rhythm is beyond metaphorical; it's a practical way to comprehend the cyclical trends and sentiments in economics and markets. This insight, of course, is firmly rooted in thorough financial models and fundamentals. In trading, as in art, form follows function. Thus, in the world of finance, art becomes a manifestation of these underlying principles.
EMOTIONAL INTELLIGENCE
Emotional intelligence (EQ) involves the ability to understand and manage one's own emotions and those of others. It encompasses skills such as emotional awareness, the ability to harness emotions and apply them to tasks like problem-solving, and the ability to manage emotions, which includes regulating one's own emotions and cheering up or calming down other people. EQ, like all skills, can be enhanced through training and experience.
It is commonly believed that creative people may possess a heightened emotional intelligence — a vital skill for managing risk in trading as well as understanding the sentiments of the market. With low EQ, a trader often finds oneself trapped in irrationality and erratic, self-sabotaging behaviors. In trading, success is not solely determined by the amount you earn, it’s about what you can keep. If you lose control, you’d lose everything.
Self-awareness and empathy play a pivotal role in navigating the emotional undercurrent that shapes the market’s behaviors, traits that traditional financial experts can often overlook. Consistently understanding our emotional state forms the bedrock for operating within the highly volatile financial market. Consequently, artists with extensive training and high emotional intelligence stand to gain a unique advantage. Having a higher EQ serves as a guiding compass for efficiently traversing the intricate and constantly evolving financial landscape.
Creative Intuition
When creating a piece of art, an artist or designer has to observe deeply into the realm of human emotion to capture its essence and understand the profound thoughts of the subject. This exercise equips the artist with the ability to constantly grasp the underlying intention and feeling that manifest outside of words a person necessarily says. This becomes a substantial advantage in the financial market, particularly when markets frequently defy the predictions made by renowned analysts and influencers. The ability to identify subtle, subconscious messages of the subtext of a speech or event can serve as a powerful tool in such volatile conditions. This psychoanalysis approach allows someone with a creative background like me to structure and profile the emotional cues leading to specific market movements and executive decisions that often contradict prior commitments.
When designing a character for a movie or a video game, a creative individual’s aim is to understand the characters by imagining their past and projecting their future in order to tell a compelling story— a practice familiar to storytellers and artists alike. These imagined narratives of a hero's rise and fall are strikingly reflected in today’s financial world, where billionaires often take inspiration from.
Take, for example, Joseph Campbell's "Hero's Journey" narrative framework. A storyteller, applying this narrative to the world of finance, may intuitively sense the need to exit a substantial investment at a certain peak, guided by an "instinct" that the protagonist, or in this case, the CEO of a company, is about to face a trial, suggesting a potential drop in the company’s stock price due to underperformance. These emotional and psychological insights inspired by the creative mind provide another unique lens to interpret and predict market movements that complement the traditional logic-based foundation.
My creative degree may initially seem unconventional in the financial world. However, fueled by an unwavering passion for the financial industry, it's become an enriching journey. While a traditional business degree might conventionally be associated with more success in finance, it wouldn't offer the same unique perspectives, innovative strategies, and unconventional execution that my creative roots have contributed.
In sharing this insight, my hope is that Highmoon can inspire those who resonate with my journey. Perhaps you too have an unconventional background or perspective that you're unsure about bringing into the financial market. I encourage you, don't shy away from your uniqueness. Especially in these transformative times, an unorthodox approach could be the key that unlocks unprecedented success. After all, wealth-building—whether pursued as a hobby or a career—isn't confined to one path. It is a multidimensional pursuit that flourishes under diverse insights.
