A Totally Different Perspective

As someone striving for intellectual honesty I am amazed at how we confront moments of truth when we least expect it.

In roughly 2 weeks time we will be lifting the lid of our new startup and start talking openly what we do and why we think we are bringing a fresh approach to an old problem.

The story behind the subject starts yesterday with me spending most of the day with a friend and advisor who occupies a unique position in the market we are looking to compete in. Because of my friends industry knowledge I was more inclined to consider what he had to say.

Vladimir and I have spent many hours discussing our business model and a few weeks ago we finally locked down our way forward, or so we thought. Enter friend X and his idea of a 180 degree switch to our business model with the prospects of making more profits in a shorter time frame and the result is one helluva confused set of co-founders.

So Vlad and I started talking but our heads were spinning we just couldn’t get a grip; we launch in 2 weeks and here is a proposal that will completely change the message and approach we plan to launch with. This is when intellectual honesty and the genuine pursuit of it comes into question. Vlad and I really gave this new approach very serious consideration.

We have finally decided to stick with our intended value proposition which might not be as profitable in the short term, but it represents our value system and the idea of disrupting the market with genuine innovation and giving as many people as possible the benefit of this innovation and giving us much lower exposure to conflicts of interest.

This leaves us as both richer and poorer, which aligns nicely with my Kabbalistic and Jungian principles of uniting opposites.

Suffering has made me more connected

It dawned on me yesterday while talking things through with my guru that the suffering I have been going through the last few months has made me more connected to my creator.

No parent should see their child suffer, for me and my family the last 8 months has been a terribly painful experience that at times has felt like a never ending nightmare. To add to that I have encountered extreme volatility on the job front, with my income being sporadic to say the least.

However with all this negativity and dare I say it “suffering” I have consciously experienced and felt emotions on a very deep positive level; this is where Jung’s uniting of opposite’s plays an interesting role. By exploring my pain I have actually become more connected to its source and while the pain is still their I am able feel a deep level of acceptance at the same time.

When one is cruising through life and things are going swimmingly it is very hard to experience things on a deep level. Laughter, fun and frivolity are superficial experiences, there is nothing wrong with this, but it is very hard to grow in such an atmosphere.

On that philosophical note, I am more than happy for all the suffering to stop 🙂

Money is in Balance

We often wonder to our self or discuss amongst our friends why Mr X is so rich and why Mr Y is so poor. There are endless treaties written that income inequality is wrong and detrimental to the economy and society at large.

There are many different economic arguments one can make for why capitalism and the free market in what ever degree of unequal distortion it presents, is healthy and part of the fabric of a growing economy. I want to focus on a more spiritual dimension of this equation and with a few extra variables would like to suggest that Money is in Balance despite the lopsided nature of the $ and cents ledger. My explanation is not for everyone as it requires a belief in a Transcendent Central Banker.

What if I said that some people are given extra wealth as caretakers so that they can give it to those less fortunate who have too little wealth. What if I went a step further and said that those who have excess wealth are being tested to see how they overcome natural selfish human desires, and that those less financially fortunate are being tested by having to humble themselves and ask for help. In this equation there is no role that is better, both roles giver and taker are part of the same balancing equation. You cannot have one without the other.

With this in mind Money is always in Balance the only variables that change are the degree of giver and taker required in the equation. However, when society breaks down in conflict there is a clear sign that the givers and takers are not doing their jobs properly and a COMPLEX erupts forcing a new “Spiritual Money Equilibrium”.

You can think of this note in the same context when observing traders. You get winners and losers, you get buyers and sellers, of course on paper we don’t have equality. There are winners and losers in the trading process. But think about it for a minute, what if I told you that every trader was a winner. Could you accept that? In monetary terms of course not it doesn’t add up. However, if you think on a deeper spiritual level it is possible to accept that the winner was a winner to test his ability to do good with his winnings and to also remain humble. The same can be said for the “loser” as perhaps the loss was needed to bring him down a peg, perhaps there was too much swagger in his stride.

So in this case Winner/Loser = Winner/Winner.

If you think like this and accept that our action and reactions are always part of a balancing equation then it gives a tiny sense of our PURPOSE and the fairness of our day to day existence.

[I hope this little note reads like it was intended. I am simply trying to say that everything in life happens for a reason and no matter what it presents to the world on an earthly dimension when factoring in the spiritual dimension there is transcendent fairness in play.]

 

Why are we so scared?

The question I pose in the subject line is not reserved for traders, I believe we are all suffering from a relative form of fear at different times of our day. I do however, feel traders or any other professional whose “worth” is easily calculated by the $’s and %’s they notch on a ledger, encounter the emotion of fear far more acutely than people who are able to “hide” in the pack when their value-add is being evaluated. I would classify professional sportsmen in the same grouping as traders.

There is a Kabbalistic idea that fear comes from being alone. This is why so many of us who expose ourselves by applying our trade in an industry that measures skill in black and white are so perpetually afraid. Don’t you remember when you were a child, going to a party on your own filled you with fear. Think of all the times in your life when you were absolutely petrified, I am sure at the time you felt alone, alienated, misunderstood.

Like all forces in life there are opposites to counterbalance the force of energy. The solution to being afraid is simply not being alone. We can achieve this in many ways and on different levels, sticking with the child going to parties on their own, a practical solution is to go with a friend. Likewise as a trader it may help having a partner to assist with certain decision making. On a deeper more spiritual level there are times when there are simply no physical solutions. Its at these times believing in a higher power and the partnership that comes from a spiritual relationship is the only cure to an existential loneliness.

Swiss Timing

This is my 100th blog post in the short 3 months of going live, and is providing me with a vital outlet for my inner thought processes. I woke up late this Friday morning, as it seems my week has consisted of one late night after another. After turning on my phone, the beeping text alerts beat me to my trusted Bloomberg app to see what happened in the markets over night.

Friday I work from Bondi so before I discuss what I think about the Swiss “shock” take a look at my office for today.

B7bVA4NCEAEtYSf B7bGL5PCUAAVa19

For those who haven’t heard the Swiss “suddenly” removed the peg to the Euro they implemented in 2011 to halt its then increase in value. The reason then was as a safe haven during the global financial crisis people were pouring their money into this tiny country and in so doing killing the countries large export economy. Isn’t life amazing, here is that Kabbalistic Jungian idea of unity of opposites: Good = Bad.

With the recent drop of the EUR to the USD and the likely further demise of the EURO the Swiss bankers decided to not continue buying the EUR to maintain the peg and sit with an enormous pile of EURO “assets” on their balance sheet.

Take a look at how the market reacted. The Swiss currency rose almost 30% at its highest during the day to then correct roughly half that.

20150115_EUEOD2_0

It dropped 3,500 pips at its worst.

The Swiss stock market also went into freefall dropping 15% before recovering to lose about 8% the worst since 1989.

20150115_EUEOD3_0

The question I want to deal with on this my 100th post is whether any of this could be anticipated? I believe YES and NO. So much for getting off the fence.

The reason I say YES, is because in terms of the theme I am developing for my book The Market Complex there was a clear interference by the Swiss Central Bank with the ebb and flow of the natural way of things which most people left unconscious and soon began to treat as natural.

The psychological rule says that when an inner situation is not made conscious, it happens outside, as fate. That is to say, when the individual remains undivided and does not become conscious of his inner opposite, the world must perforce act out the conflict and be torn into opposing halves. Collected Works, A Symbol of the Self.

So yes when a complex is identified it is known that it will produce unpredictable eruptions (read: sudden market dislocations like today). However the answer to whether we could anticipate when this shock would take place the answer is NO. When the energy around a complex amplifies we do know that things are about to become increasingly unpredictable. The news out of Europe and the threat to the Euro’s long term existence is being well played out in the media and political circles. I think it is fair to say that an eruption in this market complex was well overdue and the best thing one could have done in anticipation was buy volatility protection or stand aside from this market.

In conclusion this picture sums it up, you cannot have good without bad, up without down.

swiss

Sefirot

I feel hopelessly inadequate to talk about this subject, but I am going to have a go. I am back in work mode proper tomorrow so will continue on my analysis of the global markets and how we go about trading them, for now let’s learn a little more about the name of this site and its meaning to me. For those not into the spiritual esoteric I suggest you give this a miss.

For those who follow the Jewish religion we are given intricate detail how to follow the religion and when to do things; however we are also taught in a more cryptic abstract way, why we do certain things. In the ancient mystical writings of the Kabbalah we are taught in allegorical form how G-d created this world, and how it exists as part of four worlds (emanation, creation, formation, action). Because G-d is infinite and we are finite beings our ability to understand his “ways” is limited and therefore we are forced to make do with allegorical examples to try and comprehend what is meant. Here is a simplistic explanation of the Kabbalistic model of creation and its significance for Sefirot Capital. I need to stress once again this is so simplistic an explanation that it verges on the blasphemous, but I persist simply because even understanding a tiny bit is worth it.

G-d had the ratzon (will) to create a world where people would create tikkun (rectification) i.e. make good triumph over evil through their own free will. With G-d’s endless light Ein Sof  nothing finite can exist within a world of the infinite, so G-d needed his presence to tzimtzum (withdraw) to create space for the finite. Within this reshimu (void) G-d passed a kav (ray) of his Endless Light to form a spiritual world Adam Kadmon (Primordial Man) by way of 10 illuminations or powers called Sefirot. The world of Primordial Man was still too lofty for us to deal with so G-d needed further tzimtzum  (concealment / withdrawl) and the 10 sefirot of Primordial Man became separated further into stand alone vessels and from these sefirot  (vessels) all of reality exists.

d-133

In the list below you can see the English definition of each Sefira.

Keter—Crown

Binah—Understanding

Hokhmah—Wisdom

Gevurah—Judgment

Chesed—Loving Kindness

Tiferet—Splendor

Hod—Majesty

Netzah—Eternity

Yesod—Foundation

Malkhut—Kingship

With that background when a reality exists that is compassionate the world is operating under the dominance of the sefira of Chesed. When we encounter harsh situations we are encountering the dominance of the sefira of Gevurah, the model gets even further complicated with each sefira containing the 10 sefirot and so on. For me Jung’s idea of the Archetypes shares many similarities to the Sefirot and it is the main reason why I chose this name for this site.

The world of the markets is a reality and this reality is governed by the Sefirot / Archetypes, it is up to us at Sefirot Capital to try and understand and identify under which Sefira / Archetype the markets are being influenced and to design our portfolio and our behaviour accordingly. I have no idea what that means in practice, what I do know is that the more whole we become and meet our real Self, the more enlightened we will become with what to do with our trading persona.

There is nothing scientific about what I am saying, I am merely hypothesizing that the markets are an extension of our every day reality, and within this world there is a metaphysical medium of intuitive energy that provides those with the sensitivity to tune into this flow of libido the opportunity to profit from this wisdom.

The Dark Side – Shadow

This is a strange topic to be writing about on the eve of Christmas where the western world is gripped in a mood of good cheer; yet here I am writing about evil. I woke up to the Dow closing above 18,000 for the first time and the S&P500 making new all time highs, and I felt compelled to share some wisdom.

Yes I am bearish the markets at the moment, and yes it is a source of irritation, annoyance and confusion so with that bit of background lets dig a little deeper. In order to do so we need to start with a quote from Jung’s Collective Works:

Unfortunately there can be no doubt that man is, on the whole, less good than he imagines himself or wants to be. Everyone carries a shadow, and the less it is embodied in the individual’s conscious life, the blacker and denser it is. If an inferiority is conscious, one always has a chance to correct it. Furthermore, it is constantly in contact with other interests, so that it is continually subjected to modifications. But if it is repressed and isolated from consciousness, it never gets corrected.

“Psychology and Religion” (1938). In CW 11: Psychology and Religion: West and East. P.131

In layman language, just like the name “shadow” implies the Jungian idea is that each persons psyche develops both positive and negative characteristics with each lived experience. The negative ones embarrass us, and we prefer not to deal with these emotions so we cast them into the shadows, i.e. into our unconscious minds where we try not confront them and try and forget about it.

I am touching on a central Jungian motif, coincidentia oppositorum – unity of opposites, which many dialectical philosophical models work with, but is an idea I am familiar with and is central to the Jewish Kabbalistic approach to creation and existence. The sitra achra means the “other side” that is from the sitra kedusha “side of holiness” and everything in the world can be seen from these polar opposites.

Ok lets get back to the subject of this note, that is the dark side our shadow. It is very important when working with the Jungian model to see psycho-dynamics in terms of energy flow. As we create positive energy so too we equally create negative energy, this is actually a very difficult concept to grasp. Here is an example; I act in a very “kind” way to Dean this creates positive energy, but there is an equal dark “mean” force created in my psyche towards Dean. That is a horrible theory you are probably saying, but that is probably your shadow acting up 😦 .

So you are probably saying assuming you accept this line of thinking – so what? The problem is that when emotions are left unconscious they form a life of their own and this is where we get ourselves into trouble. A typical manifestation of the shadow complex is for it to find expression via projection. The reason why we don’t want to allow projection to play out is due to the completely irrational / random nature of projected behaviour. Here is an example of how this plays out:

Its the holiday season and we live in beautiful Sydney a highly desirable location. Friends contact me and ask if they can stay with us for a few days as they are passing through town. I accept and I am the perfect host. I use every bit of my energy to make sure that our guests have a great time. I am attentive, I am resourceful I am all things good what I am unaware of is I am building shadow material. The guests leave having had the best stay ever, and I am just about to kick up my feet and peace out in quiet watching some cricket, and the missus says, “Mike will you go past the shops and pick up some bagels”. What do I do, I go friggin mad and scream and shout how ungrateful she is and launch into a completely irrational tirade. Do any of you recognize this pattern, I suspect so LOL :).

We have all heard that saying, “the bigger you are the harder you fall”. This is very common with politicians or other people who occupy positions of power. I think of Elliott Spitzer as a classic example of someone who clamped down on crime and prostitution only to fall for this very activity. Or think of religious people perpetrating sexual misconduct, acting precisely against what the religion they represent stands for.

Does this mean we are destined to be ruled by our shadow? No not at all, the secret is to bring our shadow into consciousness. This secret formulae has the potential to diffuse the negative energy. What is even more amazing is that our psyche can be “tricked” through symbolic ritual/activity. Marie Louis von Franz one of Jung’s greatest disciples, used to always recommend to friends and colleagues experiencing hubris to go and take out the trash or some such “lowly” activity to symbolically balance the libido/energy from the shadow.

With many stock indexes at all time highs, it is easy to develop shadow material. It is times like these when markets climb and we profit to fall into the fooled by randomness trap and think it is all us. This shadow material will eventually want to express itself, it may be through excessive risk taking due to our inflated sense of Self or it may manifest in us buying a Porsche that we cannot really afford. Remember the psyche is open to symbolic gestures, if you have benefited from the bullish markets, think of a creative way of bringing the shadow material associated with it to consciousness or less energy potent. Perhaps it may be something as simple as this:

I made 25% in my investment portfolio this year, when I take the market beta into account I actually only added about 2% through my stock picking ability. This is a simple way of acknowledging and diffusing the shadow that likes to think that all 25% was my doing.