Profit And Loss

Yesterday I exercised some stock options

What has been at the back of my mind for weeks now is that I would rather have a chunk of money in my account "just in case".  Life is uncertain enough - more so now than ever - and having more of a cash reserve seemed like a prudent thing to do..

Exercising options is always a hard thing for me, mostly because I have bought into the concept of "leaving money on the table".  To be far, you always leave some money on the table if you want to be ultimately successful (otherwise you run the risk of losing all the money on the table).

The other thing that is potentially issue - or it was last year - is the amount of taxes that potentially comes from such a sale - there is no point getting money and then having to pay even more of it to the government!  So sometimes the highest price is not the best price.

The thing that always plays at your mind, of course, is the first point:  I could have made a little bit more.  I am better with this than I used to be, most of all from a story by the founder of Itto Shoden Muto Ryu, Yamaoka Tesshu:

"One day it happened that a certain wealthy merchant (Hiranuma Sanzo, founder, Hiranuma bank) came by and requested some of my brushwork.  He spoke at length about his own personal history, and his story was remarkable.

He said:

'The world is a strange place.  I feel heistant to talk about myself, but I do think this rather a mystery.  I was born into an extremely poor family, but now, quite contrary to expectation, have amassed great wealth.  This is truly surprising.

Among the experiences of my youth, I think about one in particular.  I had put together four or five hundred yen, and laid up a stock of merchandise when, out of the blue, a rumor went around that prices were going to fall precipitously.  Then, when I got nervous and thought that I should sell everything, my acquaintances took advantage of my weakened state and came running to buy up all my goods cheaply.  In the end, I had my heart in my mouth, found my feelings wavering, and was unable to understand the true value of my goods at all.  I became confused about everything and was completely demoralized.

At that point, I gave up and, regardless of the circumstances, let the matter take its own course.

But as the days passed, a number of merchants approached me and said that they would buy all my goods at ten percent higher than the original cost.  This time, however, I remained firm and replied that I would not sell at a low ten percent profit, thinking that I might be able to get another five percent.

Now, it would have been all right for me to have sold out at the price they offered, but greed blinded me and, while I was thinking, "I'll sell higher, and maybe even higher yet", in the end, the goods finally sold for less than twenty percent of the original value.

At that moment, I understood the true temper of business for the first time.  I now think that if you're going to step in and engage in some large enterprise, and become nervous about winning and losing, or gains and losses, the [simple] laws of commerce will not suffice.  After all, if you're dead set on making a profit,  you'll become quite nervous and if you're afraid of taking a loss, you'll be unmanned altogether.

Since then, I have changed my thinking and have understood that if I worry over things like this, I will be unable to complete great enterprises at all.  Now, no matter what my intentions, I first clear my mind, settle my thoughts, and get a grip on myself.  Then, when I set about my work, I do not get caught up with this and that, but do the job rapidly and constantly.  After ,that, regardless of any gain or loss, I feel that I have done the job of a proper businessman.  Thus I have arrived at the place you see me today.'" (The Swordsman's Handbook, William Scott Wilson)

I may not always get it precisely right - but I do have a better sense of doing the work and then being done.