Everyone wants the home run. They want the outlier trade that changes their net worth in a single month. They want the “White Lotus” moment.
But nobody wants to do what it takes to get there.
I was reading about Mike White recently. You might know him as the creator of the massive HBO hit The White Lotus. Everyone calls him a genius now. They look at the awards and the ratings and assume he just walked onto the set and made magic happen.
They ignore the math.
Before that hit show, White spent twenty five years eating losses. He had a show called Enlightened canceled after two seasons. A sitcom called Cracking Up was pulled halfway through season one. Another drama aired four episodes before the network killed it.
That is a lot of small losses. That is a lot of drawdowns.
For a quarter of a century, he was grinding. Pitching pilots that never got picked up. Writing scripts that died on a desk somewhere. In the trading world, we call this the whipsaw. This is the cost of doing business. You take a small loss. You take another small loss. You feel like you are treading water while everyone else tells you to give up and get a “real job” with a steady paycheck.
But White didn’t quit. He understood the probability game even if he wasn’t looking at a price chart.
When asked how it felt to finally have a global sensation after decades of disappointment, he gave the perfect Trend Following analogy:
“I just feel like I’m like a surfer who’s been in the ocean for 25 years and suddenly caught a wave. And you know, if you stay out there long enough, you’re going to catch a wave.”
Read that again.
If you stay out there long enough.
Most people are not willing to stay in the water. They want to predict when the wave is coming from the safety of the beach. They watch CNBC. They read the fundamental reports. They try to time their entry perfectly so they never have to get wet and never have to feel the cold shock of a losing trade.
They want the gain without the pain.
But you cannot catch a wave from the sand. You have to be out there, floating on the board, looking like an idiot when the waves are flat. You have to be willing to paddle for a wave, miss it, and paddle back out.
This is the essence of Trend Following. We are not predicting the market direction. I don’t know if gold is going to 3000 or 1500 next month. I don’t know if the S&P 500 is going to crash tomorrow.
I just know that eventually, a wave comes.
History proves it. Human nature proves it. Markets move in trends because people are emotional and irrational. There will always be a boom. There will always be a panic.
Mike White didn’t know The White Lotus was going to be the one. He just kept placing bets. He kept his position size manageable (he kept writing) and he stayed in the game. When the trend finally hit, he was positioned to ride it all the way to the bank.
If he had quit in year 24, he would be a footnote. Because he stayed for year 25, he is a legend.
Trading is no different. You cut your losses short. You keep your powder dry. You accept that most of your trades might be break-even or small losers. You accept that you might go months without a major winner.
But when that trend catches, when you finally hook onto that outlier move that goes on for months or years? It pays for every single false start. It pays for every canceled pilot. It pays for the 25 years of waiting.
Don’t try to outsmart the ocean. Just stay in the water.
Start paddling,
Michael Covel
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Cheers,
Adnan
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