Plato, the ancient Greek philosopher, once said that thoughts are two steps removed from reality. This statement may seem cryptic at first glance, but it carries a profound meaning that is relevant even today, especially when it comes to investing.
When we invest, we rely on our thoughts and judgments to make decisions about the future movements of the markets. However, according to Plato, our thoughts are not direct reflections of reality. Instead, they are two steps removed from it, meaning that they are interpretations of our perceptions and not the reality itself.
In the context of investing, this statement becomes even more relevant. When we analyze the markets, we often rely on technical analysis, which is the study of past price and volume data to identify trends and patterns that can be used to predict future price movements.
Technical analysis provides us with objective data that can be used to make informed decisions about buying or selling assets. However, even this data is not a direct reflection of reality. It is simply a representation of past market movements that we use to form our thoughts and judgments about the future.
Furthermore, even after we have analyzed the technical data, we still need to put our thoughts into words before we can act on them. This is where Plato’s statement becomes even more relevant. Speech is another step removed from reality, as it is our attempt to convey our thoughts to others.
When it comes to investing, speech can be particularly problematic. As soon as we put our thoughts into words, we run the risk of being influenced by the opinions of others. We may hear something that contradicts our analysis and change our minds, even if our analysis was sound.
Therefore, relying on our thoughts and words alone is not enough when it comes to investing. We need to rely on technical analysis to provide us with objective data that we can use to make informed decisions about the markets. Technical analysis is the first indicator of how the markets move, and it provides us with a solid foundation upon which we can build our investment strategies.
In conclusion, Plato’s statement that thoughts are two steps removed from reality is a reminder that our perceptions of the world are not direct reflections of reality. This is especially relevant when it comes to investing, where our thoughts and judgments can be influenced by speech and the opinions of others. Therefore, it is important to rely on objective data, such as technical analysis, to inform our investment decisions and minimize the impact of our subjective thoughts and words.