Success and rationality

Here's the Times' obituary of Nils Taube:

Taube is perhaps most famous for anticipating the stock market crash of 1987. He had been shorting stocks — selling in expectation of a fall in prices — for several months before the crash, which initially led to heavy losses. By December, though, he had made a profit of £75 million.

This points to two sources of successful trading that are sometimes overlooked.
One is deep pockets. Had Taube not had these, he'd  have had to close his positions early, and would never have come good.
The other is a pig-headed stubbornness. Without this, Taube might have decided to throw in the towel, figuring "it's one thing to know that markets are stupid; it's another thing entirely to know when they'll see sense."
And this raises a question. Could it be that one requirement for success in trading (and perhaps elsewhere) is that one be non-rational, in the sense of being over-confident, and holding one's opinions more strongly than the evidence warrants? My personal experience of traders suggests so.
Maybe markets don't select for rationality.
Another thing: The Times contains the saddest line I've read in a long time: "Taube was taken ill last week while sitting at his Bloomberg terminal at 7.30 in the morning." Doesn't this show the truth of Mr Bernstein's claim in Citizen Kane: "it's no trick to make a lot of money... if what you want to do is make a lot of money"?
I was never cut out to be a trader.

Comments

[Patrick, London]

Another pearl of wisdom on this is: 'The markets can stay irrational longer than you can stay solvent' - even if you ultimately are proved to be right you might very well still get your fingers burnt.

[Mr B]

Nils Taube loved his work and it was not about the money. He would have gladly paid to do what he loved. Nils was also not a trader; he was an investor. You don't do something as well and for as long as he did unless it is your passion. The money was an amusing side show to the man.

[Sarah Bevins]

"Taube was taken ill last week while sitting at his Bloomberg terminal at 7.30 in the morning."

Do you reckon the old boy was cracking one off? I hope he went out with a bang.