Wednesday, April 02, 2014

From Henry Carstens and Brett Steenbarger: Markets and Life Philosophy

I've been honored to know Henry Carstens for many years--probably more than either of us care to count.  His Vertical Solutions site has a number of gems on the topic of system development, including quite a few worthwhile papers.  (The backstory is that Henry and I met through our mutual interest in the writings and insights of Victor Niederhoffer).

Today's post began as a short email from Henry to me yesterday.  I quickly expanded on Henry's idea, he expanded on mine, and pretty soon we had developed some interesting insights on markets and life.

Below is the sequence; a subsequent post will provide reflection:


Stress is the inability to find or execute an edge in life.


Stress results from challenges in finding/executing an edge in life.

Distress results from the inability to find or execute an edge in life.

Well-being results from fresh opportunities to find/execute an edge in life.

Edges in life are ever-changing.

This guarantees stress.

The inability to change/evolve guarantees distress.

Flexibility/adaptability guarantees well-being.


 Success results from finding an edge

Ever-changing edges guarantee unlimited opportunities for success

With implications for

Goal setting


What’s my edge?

Why do/don’t I have an edge

[How do I find an edge]

And from far out in left field

In relationships, work or personal, the disproportionate sharing or appreciation of edges results in stress

Having an edge means

Reducing life, or aspects of life, to non-random processes

Continuous improvement and practice can be applied to non-random processes


The most well-worn paths in life possess the least edge;

Ergo, traveling well-worn paths ensures stress and distress;

And paths that lack stress probably lack edge.



Automate or delegate an edge implementation so you can work on new edges

Combine w/ other edges to build new derivative or evolutionary edges

Automate edge creation and build an edge factory

Estimate when and how fast an edge will degrade
So here's one takeaway question from yesterday's email exchange:

How would you be leading your life differently if you were looking to maximize your edge as a person?  As a trader?