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Throw Away the Key

January 13, 2018

In my first week as an intern for Ritholtz Wealth Management I asked Michael Batnick, director of research, for a book that I should read. He handed me a copy of Jason Zweig’s Your Money and Your Brain and as I read it I felt the messages within resonating with me. One of the central ideas Zweig promotes throughout the book is to not look at your investing account on a routine basis. Little did I know at the time how applicable that message was to my unique, circumstance.  


My dad always knew I had an affinity for trading. When I was growing up he introduced me to an  MMORPG known as EverQuest. During the weekends he would help my siblings and I explore the fantasy world of Norrath. I was entirely enthralled with this new universe and as soon as I was competent enough to type I rolled up my own character and embarked upon my own journey. One of the concepts central to MMORPGs - with which almost all of them struggle, by the way - is that each one has some sort of economy. As each player goes about the daily duties of killing, questing, and raiding, they are rewarded with either the game’s currency or with “loot” that can be sold for currency. This currency can then be used to buy new items for your character. While I enjoyed EverQuest’s exploring, hunting, and socializing, what really piqued my interest was trading.  


EverQuest had a feature called “the Bazaar”, which was where players would open up their own shops and offer to sell the items they had acquired while playing the game. Every time I logged on I would investigate all the player owned shops just to look at the items they had for sale and the price people set for them. Over time I became pretty good at noticing what items someone had up for cheap. The natural move, then, was for me to log on to my dad’s account, steal his gold and then buy the item for myself. (He couldn’t even escape his kids spending his money in a fantasy world let alone the real one :) After having my fill of looking at the shiny new item, I would put it back up for sale at a higher price than what I bought it for. Little did I understand how important this concept would be.  


Fast forward to 2014. I just finished my first semester at college as a computer science major and realized that wasn’t going to be my career path. Of course, I had no real plan for what I wanted to pursue instead. On the tense six hour drive home from Rochester back to Connecticut, my dad recalled my fascination with trading in EverQuest and had the idea to open up a small investing account for me. Over the next few days we opened a Charles Schwab account and he gave me $1000. At the time I didn’t know anything about ‘real’ trading or the market for that matter and just put the money all into Apple stock, a revolutionary idea.


 At that point the account didn’t ignite my inner Buffett, and after a few months later I forgot the account even existed. This turned out to be a genius move. About three days ago my mother handed me a letter in the mail about an Apple shareholders meeting. After some serious effort I finally remembered the existence of the Schwab account with its stash of AAPL. After figuring out my username and password I was met with a nice looking green number. My $1000 worth of AAPL had tripled, and all I had to do was forget it even existed. Investing is easy.  


I think an important moral can be wrung from this tale. Zweig writes this in his article Is Your Brain Wired for Wealth: “Strap yourself in. Because the amygdala is an almost irresistible force, you must reduce your exposure to images that can provoke panic. Turn away from stock tickers; turn off the televised images of closing bells and yelling traders. And promise aloud or in writing, before a friend or family member who can hold you to it, that you won’t check the value of your accounts more than once a month.” It takes a while for good decisions to reap their rewards and the worse thing we can do is constantly change our process. The world may be a richer place if more people forgot about their investment accounts.





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