The Root Cause of Investors’ Losses

—On Investing, Impermanence, and the Nonexistent “I”
I still remember that garden. It was not on any page of any map, nor did it belong to any monarch I had ever studied. Some said it had fallen into ruin; others said it had never been built. But I knew it truly existed, because I had spent an evening there. That evening lasted longer than an overnight gap after going all in.
I entered through a small path. At first, there was only one. Later, it split into two. Later still, four. When I looked back, the path I had come by had disappeared. I stood among countless paths, like someone holding an old map while the ink on it vanished inch by inch.
Just then, an old man emerged from deep within the shadows of the trees. His body was light, like a sheet of paper blown by the wind for a long time. The first thing he said to me was:
“Are you still predicting the market?”
I did not answer.
He smiled. He pointed to the map in my hand, then to the paths spreading in all directions:
“The market is this garden. You think there is only one path—it goes up, or it goes down. You think time is an arrow, shot from today toward tomorrow. But in reality, time is a web. Every present moment leads simultaneously to countless elsewhere. You think you are choosing a direction. In fact, you have merely opened your eyes wide enough to see one path, while mistaking all the others for nonexistent.”
I sat down on a broken stone bench. There was old moss on it, traces of rain, and several lines that looked as if they had been scratched by fingernails, remarkably like candlestick charts.
I said: But I have data. I have logic. I have insider information.
The old man turned around. His eyes were bright—too bright for an old man.
“Data,” he said, “are signposts belonging to paths that have already died. Insider information is a corner someone else has already walked around. They can both take you somewhere, but neither can tell you whether that place is the only place. You think that with these things, you can compress the world from countless possibilities into one. That is the greatest pride. Prouder than greed. Greed merely wants to take a little more; pride believes it can decide how tomorrow will unfold.”
The wind blew from deep within the woods. I heard the rustling of leaves, like countless fingers turning countless pages. Every path swayed in the wind, as if waiting to be chosen, yet also mocking the person who thought he could choose.
I. Impermanence
The old man said that the essence of this world is impermanence.
Not the “impermanence” from a philosophy class, not four words used merely for discussion. It was the impermanence behind every moment and every price.
“Have you seen that leaf?” He pointed to a branch above my head. There was a leaf on it, already half yellow.
“What you see in this leaf is the result of hundreds of millions of causes converging simultaneously. The direction of the wind, last night’s frost, this year’s spring rain, the slight movement caused by a bird’s wings as it flew past. Each cause is connected to an endless number of other causes. You cannot even count why it appeared here, at this moment, in this form. You can only say that it appeared. It appeared, but it could just as well not have appeared. It could have been higher on the branch, or already fallen in last night’s rain. Its being here is one possibility among countless others. And this is impermanence.”
The old man lowered his voice, as if delivering a eulogy for a leaf.
“Price is also this leaf. The candlestick chart you see is the manifestation of boundless conditions and causes at that moment. It is not inevitable. Out of tens of millions of possible movements, it is a shadow that has temporarily collapsed into being because you observed it, because you opened your eyes.”
“It is a shadow,” I said.
“Yes. A shadow. And you have mistaken the shadow for a stone. You hold it in your hand, thinking it will not disperse.”
II. Prediction and Arrogance
I asked him: Then why do I lose money?
He looked at me for a long time, as if looking at someone who knew the answer yet still asked the question.
“Because you want to become God,” he said. “You want the world to follow only the path in your heart. Among countless possibilities, you choose one you like, then tell yourself that it is the future. You are not predicting. You are issuing a command. It is just that what you are commanding is a garden that obeys no one.”
“But people who study macroeconomics, people who build models—they have made money too,” I said.
“They made it by chance,” the old man said. “They thought they were repeating a verifiable pattern, when in fact they were merely mistaking their own shadow for the sun during a brief stretch of good luck. And luck is the most impermanent thing of all. It will not linger for even one extra second because you are intelligent.”
I fell silent.
The old man continued:
“Prediction is the greatest conceit. You think there is an ‘I’ standing outside the world, seeing the world clearly. But that ‘I’ itself is part of the world. How can a wave predict the entire ocean?”
He paused. The wind lifted the sparse white hair on his forehead.
“The market is not your opponent. Nor is it your friend. It does not even know you. All your hopes, fears, positions, stop-loss orders, and liquidation levels will leave not the slightest trace in that trading system. You think you are fighting a market. In fact, you are merely fighting impermanence. And no one can fight impermanence. No one ever has.”
III. No “I”
I suddenly felt that everything in the garden was moving. The trees, paths, light, and shadows all seemed to be moving slowly and aimlessly. Even the stone bench I was sitting on seemed to be sinking.
“Then what should an investor do?” I asked.
The old man said, “First, do not be an investor.”
“What?”
“Do not be an investor. Do not be an analyst. Do not be a prophet. Do not be an ‘I.’ Once you have an ‘I,’ there will be ‘my opinion,’ then ‘my judgment,’ and then ‘my loss.’ And this ‘I,’ from beginning to end, is merely one bubble among countless fluctuations.”
I looked at him. He continued:
“A bubble thinks it can see the flow of the water clearly. This is investing. This is loss. Not because the water is too complicated, but because the bubble takes itself too seriously.”
“But no one can be completely free of self,” I said.
“Yes,” the old man nodded. “But you can first acknowledge that it does not exist. You can first acknowledge that you are not the person placing bets in the market; you are merely a point being passed through by the market. No I. No prediction. No certainty that tomorrow will rise. Nor any certainty that tomorrow will fall. No black swan. No black swan that is certain never to appear. You must dismantle the ‘I’ in your mind. Once it is dismantled, the rises and falls remain, and impermanence remains, but your hand will no longer reach for things you should not touch.”
IV. Insider Information and the Gambling Instinct
I asked again: What if someone obtained insider information in advance?
The old man smiled. The smile was not cold; it was even somewhat compassionate.
“Information is the reality as you perceive it. But reality will become something else once you turn on your computer. You knew the financial report in advance. But you cannot know in advance which room the president will be in tonight, at what minute, or which word he will write. You cannot know in advance which ship is changing course in the night fog across the strait. You cannot know in advance that your information has already been digested into the price by the information itself. Information is not truth. Information is merely another leaf. It will fall. It will change. And just when you believe in it most, a gentler breeze will blow it away.”
“What about the gambling instinct?” I asked. “People often say that losses come from gambling.”
The old man shook his head. He picked up a fallen leaf and placed it between us.
“Gambling is only the surface. Why do you gamble? Not because you are greedy. Greed is the fruit of gambling, not its cause. You gamble because you refuse to acknowledge impermanence. Because you refuse to acknowledge it, you must place another bet. You want to use money to pin down impermanence. You want to use a buy order to prove that tomorrow will rise, and a sell order to prove that tomorrow will fall. But you cannot prove it. Impermanence will never be pinned down by any order. It is not even a nail. It is lighter than the wind, faster than light, and leaves less trace than memory.”
He opened his hand. The leaf did not fall. Carried by the wind, it flew diagonally upward, passed through several paths, and disappeared from sight.
“You gamble because you are afraid. You are afraid because you do not believe. You do not believe because you treat the world as a question with a standard answer. But the world has no question. The world only unfolds. It only fluctuates. There is only one leaf, and countless leaves you have not seen.”
V. The End of the Garden
The sky darkened. The paths through the woods had become indistinct. The paths were still there, like quiet arms in the deepening dusk, reaching toward places I could not see.
The old man stood up. Like an old sheet of paper lifted by the wind, he slowly walked toward one of the paths.
I asked him: Sir, does this garden have an end?
He did not turn around. The wind carried his voice back, light and clear:
“Yes. It is this moment.”
I looked up. The stars above me began to shine. They were arranged like a candlestick chart from some night, yet none of them could be connected. Each star seemed like one possibility among countless others that had just been seen. No direction. No tomorrow. No rise or fall.
I suddenly felt that I no longer wanted to predict anything. I simply sat there. The wind passed through me as it would through a piece of wood with no memory. No I. No position of mine. No opinion of mine. Not even my regret. Only impermanence. It did not hurt anyone. It simply existed.
Later, I often thought of that garden. I thought of those branching paths and of the old man. But more often, I thought of the final sentence he left unspoken. It was like a leaf that had already begun to drift upward:
“The market is not the garden. You are. Among your countless forms of impermanence, you chose one self and called it an investor. But the real you has never been in it. Nor have you ever left.”