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As I write this, on FOMC day, New York City public schools are closed. The weather forecasters predicted a massive snowstorm (12 inches!) and yet at 10 o’clock in the morning the flakes aren’t even sticking and all we have is slush on Broadway.
Still, I completely understand why Mayor de Blasio made the call, although disgruntled parents will now hold him in even greater contempt for messing up their workweek.
The storm was initially forecast to hit at midnight but didn’t arrive until 8 in the morning so making a last minute decision was impossible. The city hasn’t had many snow days this year, so there was room in the budget as well as in the school calendar to call one. Yesterday marked Spring Equinox – so really how many more snow storms can there be? Better safe than sorry. Snow day it is.
Notice that in all that chain of reasoning the one question not addressed – will it actually snow storm bad enough to close schools?
As human beings, we make decisions for a whole host of reasons that have nothing to do with the problem at hand. We are always surrounded by exigent circumstances that muddy up our logic and often produce suboptimal results.
How many times as trader did you pull a trigger on an idea because you were bored and “it was good enough” or you had a good day and built up a nice P&L, and then made a spec trade that wouldn’t pass muster under normal circumstances? Now that it was on the books you watched it with all the possessiveness of jealous lover, convinced that it was the best idea ever.
We THINK we make the trades for the right reasons, but I bet that at least 30-40% of the time we are in the trade for every other reason except the one that matters. There is not much we can do about it. It’s human nature. As Jeff Goldblum and Kevin Kline said in the Big Chill,
Goldblum: I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex.
Kline: Ah, come on. Nothing’s more important than sex.
Goldblum: Oh yeah? Ever gone a week without a rationalization?
We can, however, at least be aware that we are often lying to ourselves when we are trading. That could help us to avoid making too many “de Blasio’s” going forward.