Seven seconds.
Seven seconds is the somewhat popular belief of a goldfish’s memory. Apparently, after seven seconds the goldfish has completely forgotten what happened prior. Whether this is true or not, let’s go with it for now.
I would say that, in some sense, having a goldfish’s memory can be an advantage.
However, understand that the media wants you to have a long memory, more akin to the memory of an elephant. They want to fill your head with all the things that went wrong, are currently going wrong, might go wrong, and will go wrong far into the future after we have all passed away.
Why? It keeps us hooked on what they are going to say next. That is how they make money. Never forget that.
The financial media would like you to believe that it is important to know what happens every day in the markets. They want you to know when the market is down 3% for the day, 5% for the week, or 10% for the month.
In this case, be like a goldfish. Give it seven seconds, no more.
I do not know anyone who measures their own personal success in days, weeks, or even over the course of a year. College typically takes four years or more for an undergraduate degree, and a graduate degree can take several more years after that. Professional success is no different. It takes years to become an expert.
I would like to hear of any professional athlete who mastered their sport in a day, week, month, or even a year. How about a surgeon? How many years before they are considered an expert in their field? Physicist, contractor, accountant—you name it—no one masters anything measured in less than years or decades.
Investing success is no different. It is measured in years and decades, not days, weeks, or months.
Mastering the markets is more about mastering yourself than actually mastering the markets.
How do you master yourself? By mastering your emotions and your memory. This is what makes investing so hard.
-Paul R. Rossi, CFA