Is there something to be learned by traders from their low-key demeanor
Last time Forbes Magazine counted them, there were 1645 billionaires in the world. Although most headlines come from the U.S. and China when it comes to the people on that list. Warren Buffett and Bill Gates are frequently in the public eye and the meteoric rise in the number of billionaires in the Asian powerhouse has eclipsed even those from Russia.
Germany has 85 names on the list, but there is something interesting in how they behave and conduct themselves. Many see it as an example of how to treat money and the risks that come with its accumulation and preservation.
The companies owned by the country’s richest vary from discount supermarkets like Aldi and Lidl, to software giants SAP and BMW. Although the people running or owning them are different, there is a recurring theme among them – limited or no public appearances, no showboating of wealth and a strict work ethic.
This isn’t to say that billionaires elsewhere are inferior, or that respecting your own privacy is something reserved only for Germany, but it does make an impression when the late owners of Aldi, Karl and Theo Albrecht (whose $25 billion fortune has now been inherited by their many children), as well as Lidl owner Dieter Schwarz, literally have one or two photos in the public domain.
The Albrecht brothers fought in WW2 with Karl being wounded on the Russian front and Theo serving in the Africa Corps. After they returned home the crippled state in which Germany was, changed their perspective on life and money. After taking over their mother’s small grocery shop they employed an extremely frugal business system, ridding their growing number of stores of anything that brought expenses and focusing on products that were sold quickly. No decorations, no advertising budget and everything placed on the pallets it was brought in.
After becoming wealthy and famous Karl Albrecht was kidnapped in 1971, subsequently being released for a ransom paid by his brother. Their approach to life was evident when Theo offset the money against tax, effectively marking it as an expense.
This event is thought to be one of the reasons behind German billionaires fear of the spotlight. But it would miss a big part the reasons the lifestyle choice they’ve made. Point in case are the family who control the largest percentage of BMW.
Herbert Quandt is credited as the one who lifted the company to its present status, and after his death in 1982, his wife and two children who have appr. 46.7% of the company’s stock are nowhere to be seen in interviews, papers or magazines. Even more so, his daughter Susanne Klatten (who took her husbands name) started off as an apprentice in a BMW factory with a false identity, so that she could learn the business from the bottom up. It even crossed into her personal life, where her husband understood who she actually was right before they were married.
All this can be seen as relative to how traders share their success or mishaps with others. Most don’t realise it, but it’s actually a part of trading. The adrenaline rush of closing a successful trade, or a losing one, is highest when that last click or swipe happens, but there is another great (or bad) feeling that follows with some delay – when you tell someone about it.
In a time of increased social sharing the number of messages and communication channels has grown, but our mental approach hasn’t changed that much. Most people continue to overshare their success and keep their failures to themselves and in an emotionally charged activity like trading, this can erode your mental state, motivation and perception of market conditions.
Sharing what happens with your trades (both the winners and losers) is generally beneficial, it reduces stress in most people and if there is no negative feedback from the other side (be it family, friends, partner etc.) it can reassuring and provide a sort of constructive confidence. However if someone does have a bad opinion this can be quite damaging.
Perhaps there’s something to learn from the German billionaires. Not that someone will kidnap you if you share everything and flaunt your success, but rather that picking one way to handle it gives you the necessary peace of mind. Either keep it all to yourself, or share it in full – the highs and the lows. Everything in between will just mix up things and can affect your trading.
German stocks and the DAX are available for trading in the Trading 212 PRO platform.
Our next article will be online tomorrow at 11:00am GMT – “Stock of the Week: JP Morgan Chase before their earnings report”