2022: May all your trades be with you

Dear Reader,

While my New Year’s wish may seem unconventional at first glance, the wording is deliberate. It is meant to underline the importance of being mindful of the fact that, while not everyone is a trader in the traditional sense of the word, all of us do trade - all the time.

Most people trade time for a salary. Some people trade risk for profits. Others trade happiness for security…principles for politics….ethics for cash. You name it, and you can bet someone’s out there doing it. See where I’m going with this? Even in our most basic personal day-to-day operations, we trade our time, energy, attention and money for other people's time, goods, services, energy and money, every single day. From who we spend time with, to what we eat, how we spend our money, and ultimately to how it makes us feel and whether it drains our energy or increases it..

Everyone trades, yet few truly embrace it with genuine alacrity (great word). Some decisions are automatic. Many should be. But what about those that perhaps shouldn't be? The ones that are merely acquiesced? Is there a stoploss in place?

In the same way that we could never have predicted most events of the last 30 years, trying to predict the next 30 would be even more audacious, perhaps even insane. This means that every plan that relies on something needing to be a certain occurrence in 30 years would be quite rash, or at least very imprudent. (Cough, pension, cough.) Better hedge your bets and play it safe, right?

But what makes this uncertainty so amazing and interesting is that there is seldom a ‘correct’ answer to every potential little trade we come across on our respective paths, that all choices are personal and, most importantly have the potential to be great.

Personally, after the first time I realized it, I could never unsee it. Because the implication then becomes that one is also always in a trade - regardless of our desired position. Long volatility, short time, perhaps? Have €€ in your bank account? A position that lacks volatility but is de facto short the stock market, long the currency of the European Union as a safe haven. Why not pick the United States Dollar to store your wealth in? Why not the Yuan? Swiss Franc? Or Gold? The Nasdaq? Bitcoin? All of the above? Thinking about it, is there even a default option anymore? Whether we want to or not, we’re all traders, so we may as well embrace it. As contemporary society’s concept of monetary policy is incrementally shifting towards geopolitical game theory and increasingly magnifies the stakes of the game, 2022 is shaping up to potentially define the next era of the format and the rules of the game.

To underline it with a quote from Niccolò Machiavelli, political strategist (and like all of us, also a trader):

Every scenario has risk, so prudence is not in avoiding danger (it's impossible), but in calculating risk and acting decisively. Make mistakes of ambition, and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.

My wish for you, dear reader, is that all the trades you take in 2022 lead to more happiness, love, health and whatever else you desire in your life.

Nils