Jeff Bezos, the richest man in modern history, the founder and owner of Amazon.com, recently said:
I predict one day Amazon will fail. Amazon will go bankrupt.
It happened during his speech to Amazon employees. His shocking statement was published by CNBC on November 15th.
When I saw this quote for the very first time, I was no less surprised than you.
But then I realized:
There is so much to learn from his statement – especially for traders!
But before we go deeper, let me share with you more of what Jeff said. It’s crucial to understand the real power behind his thinking.
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Here is the full statement:
“I predict one day Amazon will fail. Amazon will go bankrupt.
If you look at large companies, their lifespans tend to be 30-plus years, not hundred-plus years.
One day, Amazon will fail but our job is to delay it as long as possible.”
Ok, so what I really like about this are two big points. I would even say they are essential points for traders. And these are:
|1.||Paying the “defense” game pays off (in a big way),|
|2.||No edge lasts forever.|
Let’s start with the defensiveness.
This is a topic I keep repeating here on Better Trader Academy quite often. The thing is, that the best way to beat the markets, is to not even try to fight with them.
When I started my trading career, I used to be very “offense-oriented”. I wanted to squeeze as much money from the markets as possible. But it never really worked out. I was losing money. A lot of money. So, I started shifting my focus to defense instead, and that’s when things started turning around a lot. Simply said, I had learned, that…
…the stronger your defense, the longer you stay in the game.
You don’t even have to think about the profits that much, because under a smart, strong defense, they’ll take care of themselves. (And I dare to say, that Jeff’s statement confirms this). This is why I spent more time than the majority of traders developing unusually tough robustness procedures. It’s a big part of my super-strong defense. (I share my robustness framework in the Breakout Masterclass). And this is also why I developed other cutting-edge defensive solutions too, like Trading Market Internals, and Smashing False Breakouts.
Now, let’s move to the “no edge lasts forever” part.
Jeff Bezos knows that. I wish some traders knew that too. In an entire history, there is not, at least from my knowledge, proof of an ever-existing trading edge. Trading edges fail. And they do it much faster than companies. To have a trading edge that will last for 30+ years is just a dream. Most edges, from my experience, last between 1-5 years (and I’m talking about really great, robust, high-quality edges). There might be a few exceptions, but these are very rare. (And no, your trading strategy very likely is NOT this exception).
So, that’s why you also need a constant flow of new strategies. Non-stop. People still don’t understand why before launching my hedge fund, I spent months developing 913 high-quality breakout strategies. (If you are curious how, take the FREE 14-days breakout challenge). But I’m pretty sure that Jeff Bezos understands that. Amazon is constantly bringing out new products and services. He sees the point: The uncomfortably high, if not almost sure probability of failure. So even having enough strategies, is part of the defense. It is part of the survival.
During his speech, Jeff also said:
“If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end,” he said. “We have to try and delay that day for as long as possible.”
I would rephrase this for a trader:
“If you start focusing on profits, instead of focusing on loses, that will be the beginning of the end.”
Defense is what profitable trading is about.
I call this “The winning mindset of failure”.
Start from there, and you might be here for a bit longer than others.
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