Dear Shrink Rap: I read your column and always learn a new thing or two. Thank you again for your recent column on dealing with feelings after the bubble. I am very good at managing the risk of my trades, and I have lost a very small sum of money as a result. Money is not the issue in writing to you today. I am a middle child of seven. On the totem pole of hierarchy, I was very low. Fair was not a concept in my family. Is it because I grew up on the short end of the stick and had to deal with a lot of very bad and negative stuff from my family that I am able to deal better than most in the market? -- DAK
Shrink Rap: For a number of reasons, this isn't an easy question to answer. The risk in answering questions like this without far more information about your personal history is that it is too easy to make glib psychological interpretations that may not hold true for you. In addition, without knowing you, it is only armchair theorizing as to how your family dynamics have shaped your adaptation to trading stocks, since you say nothing about what you have had to cope with in adulthood. When people use the term "pop psychology" contemptuously, it is often because of hearing or reading psychological generalizations that don't seem to make sense to them. So, with all that by way of qualification, let's briefly wade into the alligator pit of interpretation and wrestle with the fanged beasts. Growing up "on the short end of the stick" is common in a family of seven children, regardless of where you fall in the birth order. It's a good bet that most of your siblings would say they, too, felt they didn't get the kind of attention from your parents they felt they deserved. With six brothers and sisters, there is a constant struggle for a limited amount of love, attention and even simple recognition from parents compared to smaller families. And, of course, you are forced to struggle for the same recognition, attention and support from your siblings. This is made even more problematic when the age range between siblings makes for competition rather than nurturing support. I've never heard individuals from large families tell me they thought the treatment they received from parents and siblings was fair. Always, they perceive one or more of their siblings to be receiving special treatment from parents. There is commonly more physical and emotional chaos in larger families than in smaller ones, if only because an adult isn't able to monitor the behavior of that many siblings at the same time, especially if a number of them are close in age. While the child's idea of fairness by parents is certainly understandable as an expectation, here is what one author, Nancy Samalin, had to say about striving for fairness: "We sometimes think that if we treat each child fairly and equally -- and make them see that we're being fair -- they will stop arguing about who gets more, who gets something first, who's our favorite. But as hard as we try to be fair, we can never succeed. Even if we believe we're completely fair, children will never agree with us. Since no one wins the fairness game, the best thing to do is avoid playing it." Here we see that, from the parents' point of view, it may not even be viewed as desirable to try and keep things fair between siblings.
Emotional Adversity as Preparation for Trading
The fact that you learned to deal with adversity growing up in your family may indeed have helped you cope with difficulties that come later as an adult, including your reactions to the market. You may have learned to manage your money more conservatively, take fewer foolish risks and, as the cowboys used to say, play your cards "closer to the vest." People who have learned through childhood that things don't come easy, and that they will have to fight for what is rightfully theirs, may approach their trading in a more disciplined manner than those who have had things handed to them throughout their lives. They may be more willing to persevere in learning trading and money-management skills, especially in protecting their gains. They have no delusions that the market will treat them fairly. Coping with the emotions of frustration, anger, fear, excitement and boredom, while trading, may be less problematic for someone who has learned to manage these emotions well, because of all the practice they have had due to family and adult adversity. The point here is that previous experience in dealing with inequality, having no expectation that the market "owes" them anything, learning to forge their own way in the face of difficulties, not giving up when things are tough -- all of these characteristics will be of aid to the trader when the markets are punishing. These hardened traders will be less likely to quit when the going gets tough. As all experienced traders know, if they can't find this mental and emotional toughness to cope with punishing markets, they simply will be knocked on the canvas and down for the count. Learning to get back up on your feet and take care of yourself in a large family is as good a place as any to begin to learn these trading survival skills.