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Pixar’s Inside Out and the Stock Market

After watching the latest animation movie from Pixar, several thoughts came to my mind and these are few of those. The characters resemble the emotions we put when investing specially in stocks. The following article contains spoilers for those who haven’t watch the movie.


Joy

Joy is the first thought that will come, as we are new in the stock market, we are excited to buy our first pick. Aiming to have our initial gain, our first share of dividends, our goals instantly pop out from our minds associated with those investments when target appreciation was realized. We are always eager to check the news regarding our picks, their projects, income, and rumors and disclosures.

Sadness

We waited days, months, years, checking portfolio with hitting some buy and sell transactions. We realized that it is not easy. We gain some, we lose some. We hit some curved balls for a home run with big ceiling plays, mergers & acquisitions, but experienced some serious injuries with lower follow on offerings, mining landslides, and other bad news.

Fear

There will come a time when we will experience black swans or unexpected situations, events, news, that will influence the stock market to correction or worse a bear market. We will soon face Mr. Fear as our paper losses mounts into 30-50% while the recovery seems far to horizon.

Anger

During our journey, we will learn fundamental and technical analysis, and meet some people who are expert in these fields. We follow their recommendations but it happens the stock reacted negatively. We blame those people and their systems, bash them on facebook and twitter.

Disgust

With the anger, disgust will come in. There is a tendency to move away from stocks where we had bad experience with the CEO, Owners, industry or just those recommended or bought by particular group or person.

Core Memories

The journey in stock market trading will create core memories. For some of younger age, turning points are those that happened last 2008 and 2013. Lehman Brothers collapse that triggered stock market selloff. Quantitative Easing season of 2013 also made some marks. The stock which hurt us the most will surely be in our core memory bank. Positive core memories will be the first stock that gave us more than 100% or a ceiling play (50%) for a day. Our first stock or IPO will be some candidates on the list also. These core memories will develop into island of dreams.

Islands of Dream

Berkshire Hathaway Island

We build this island in our minds, aiming to be like Warren Buffett who earned millions thru picking the right stocks.

Cashflow 101 Island

Robert Kiyosaki’s idea of building wealth thru owning different properties and businesses that will generate passive income big enough to cover our lifestyle.

Truly Rich Club Island

Those with altruistic minds will think of establishing foundation that will help the poor and support different groups caring for homeless kids, environment, and endangered species

Retirement Island

An island most of us would have in our memories, whether it is a farm life, an island beach life or a tour around the world.

Family Island

Our core memory is full of experiences with our family. For OFWs, we dream of enjoying life with our spouse and children. For singles, we dream of house with our parents, future spouse and baby.

Hybrid Core Memories

Sadness and fear can be a source of hybrid core memory. In the movie, Riley experienced sadness when he failed to make the winning shot during a hockey game. The situation gave two happy core memories in the form of the hockey island and a good foundation for the family island. Our sadness and fear during losses in stock market would influence us to learn more the tools, history, and improve our strategies. Anger and disgust to those that gave the wrong recommendation or cheated on us some way or another would be a lesson who to trust and who will be a good example of a mentor. It teaches us also not to rely on others too much with our decision making.

The islands listed in the island of dreams would collapse if we will not realize the importance of combining our emotions and memories for a solid foundation. In order to reach specific goals we should not expect joy alone, we need sadness, fear, anger, and disgust as well. Learn to control each and use it for our benefit in building our individual dream islands. The experience of a big paper loss or a wrong stock pick can be a foundation for bigger opportunity or lesson in the future. As Gretchen Rubin mentioned in her book “The Happiness Project”, to be happier, you have to think about feeling good, feeling bad, feeling right, in an atmosphere of growth. Growth involves joy, sadness, fear, anger, disgust, their combinations and our imaginary friend.
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