Thursday, April 08, 2010

Reflections on Dr. Brett's Blow Up

I've worked hard over the years on my trading, developing ideas, indicators, and ways of looking at markets. And making some money.

Today, however, I blew out and lost everything.

It happened so suddenly: one minute everything is going fine, then suddenly I'm falling to earth and my chute won't open.

I was sick to my stomach for much of the morning. It is not easy to see everything you've achieved suddenly wiped out.

And the worst part of all was knowing that it could have been prevented.

No, I didn't lose my money in big trades and oversized risk. What crashed was the hard drive on my computer and everything I had on it: all the writings, all the research, all the records.

So all day today, I've been restoring files and reinstalling programs.

If I hadn't prepared for a catastrophic loss with a good backup service, I truly would have wiped out.


And that's the lesson of all this: to succeed, you have to keep an eye on the ideal, but keep the other eye on what can go wrong. It's the tail risk, the statistically unlikely, catastrophic outcomes, that catch up to people over time and bring them down. That's because no one likes to think about negative outcomes, and it's certainly no fun to actively anticipate and plan for them.

But planning for catastrophe can be the difference between a day's setback and the setback of a lifetime. It's that seahorse vision that accounts for long-term surviving and thriving: one eye on opportunity, the other on threats. One perspective driving you forward, the other keeping you in the game. One plan for the future; the other for backing up and preserving what you have.

Hope and strive for the best. Plan for the worst. And make sure that life's fat tails of risk can't take you out of the game for good.
.

15 comments:

nummy said...

wow Doc, sorry to hear that :(

I suggest mirrored RAID drives ... those have saved my ass countless times.

kdm said...

Wow you really scared me there for a minute. It really sucks about your hard drive been there done that, no fun. I hope you are able to continue your work because I find it invaluable. Thanks and good luck.

skogie said...

I owe to your blog this: go in with a plan....and a plan B if A doesn't work out. i.e. disaster recovery.

Jorge said...

Dr. Steenbarger,

Sorry to hear about your hard drive crash. Online backup services are fine for limited backups of critical files, for more heavy duty May I suggest an inexpensive Raid 1 setup?

By the way, the only thing that was wiped out today was your hard disk; everything that you've achieved lives on, out there, in the form of the thousands of people you have touched.

All the best,


Jorge

Mark Wolfinger said...

When I read the first few lines, I though you were just late for April Fool's day.

Sorry for the problems.

Regards

DNO said...

Two thoughts:

I have a 2 tier structure at home: my main machine and a windows home server (from HP) that does a full backup each night. This server also has a a secondary purpose with home photos, videos all on board etc. In the event that my machine fails, a CD in the floppy allows an full restore to the repaired (or new) machine

I then also (because I am paranoid) backup the home server to an online service in the cloud as a ultimate disaster scenario.

A significant amount of hard drive failures are not "total", but rather just a tiny piece has failed, and good software can recover around that for you. The best I have seen (and it is available for instant download) is SpinRite, by Gibson Research - very good software.

The Sanch said...

I was pretty shocked there for a moment, too. :-)

Happy to hear that you were still prepared.

Dr Bill said...

You don't have to post this....I'm a carbonite guy myself. I know both services do yeoman's work. I've even changed computers under carbonite and the headaches were within reason. That annual fee sure paid for itself for you this year.

I think RAID drives are like putting lightning arrestors on a house--I'm not sure they don't attract a higher risk of a strike, but they also protect against those the consequences of a strike.

Cleverly written. The reverse up this AM didn't look that surprising to me, so I assumed you'd have been all over it. Like kdm, I was reading it as if somehow you loaded up on a short at about 0945 EDT-- that'd be something I'd do.

Have a fine weekend.
Bill

Krasimir said...

Brett, sorry to hear that...

A couple of years ago this happened to me too. I know how you feel. I've learned from my mistake and now I use two hard drives on my computer. One for current data and the other for backing up that data. I've been using backup manager software which backs up every day critical data to the back up hard drive. Separately, I back up my data on external drives each quarter. Hope this gives you some ideas.

RDV said...

Two wonderful must-reads on this topic: Nassim Nicholas Taleb, Fooled By Randomness; and The Black Swan.

Eiji said...

Sorry to hear that.
but you are not alone.
it happened to one of us in my office recently too.
I suggest ontrack data recovery service(www.ontrackdatarecovery.com).
they are very good at what they do.
but very expensive too.
80GB SATA 10,000rpm drive recovery cost us $1500.(price depends on how badly it is damaged)
Good luck.
btw. i have no business affiliation with them. ;)

Adam said...

Brett ~

Oh, that sinking feeling! I remember well one sunny afternoon a decade ago suddenly confronting the dreaded blue screen of death.

The dizzying plummet into despair was sickening; the loss was nearly total ~ fortunately at home, not the office.

I'm glad to read you're in recovery from that spin, as what you've got stored on your system is surely more valuable than the average nonsense.

You've received good counsel (above) on backup methods. Like others commenting here, I'm paranoid: auto-backup to RAID and an online service.

Now you're a seasoned campaigner with seahorse eyes.

Adam Sterling.

passiontotrade said...

Sorry to hear of your troubles. Never a good time for that to happen!

A RAID system didn't work for me. All the drives failed together. Don't know why.

Now I use external backup drive, CDs or DVDs, and online backup for the databases.

I assume you bought a new drive -- to be safe. You can send your old drive to a recovery service as mentioned above if there is anything on it that was not backed up.

Tim T said...

been there done that, I have my backup backed up :)

carlos said...

You can't be too safe. As others suggested, I use RAID 1 as primary backup, a plug-in external drive for nightly secondary backups, and have used an online backup service in case the house burns down.

That's 3 levels of protection. My business partner goes further and swaps out his backup hard drive every 2 weeks with another one he stores remotely.

I had a RAID drive fail a few months ago, and it was a wonderful thing to experience. All my computer functions kept working completely normally, I just got a notice that one drive was out. I removed it, shipped it back to the manufacturer (it was under warranty), and when the new one came in, just plugged it in and it automatically rebuilt itself. Didn't miss a beat throughout the entire process.