A photo of Paul Tudor Jones in his office c. 1987The following is the second in a seven part series on investor pyschology and how to avoid falling into traps that negatively affect your outcomesWrath is what happens when frustration turns into anger and anger takes control. It is the loss of composure and the urge to fight back when the world refuses to do what we want. The wrathful person stops accepting reality and starts trying to force it to bend to their will.In investing, this happens when the market refuses to validate a thesis. A falling share price or a long period of underperformance begins to feel like a personal slight. The investor starts treating the market as an opponent rather than a source of information.This is where mistakes happen because anger demands an outlet. The investor doubles down on a losing position, adds leverage, abandons their process or places trades they would never normally make. The goal becomes to prove the market wrong instead of making money.This emotional volatility destroyed the greatest speculator who ever lived. During the 1929 crash, Jesse Livermore amassed a fortune of more than $100 million, making him one of the richest men in the world. Yet he repeatedly lost vast sums because he struggled to maintain discipline when the market moved against him. Time and again, frustration led him to ignore his own rules and force trades that had no business being made. He could read the market better than almost anyone, but he could not always master his own reactions to it. In 1940 he was bankrupt and shot himself dead; the ultimate price of his wrath.Paul Tudor Jones is the opposite. During the October 1987 crash, while panic spread across financial markets, Jones produced a 62% return for the month. His advantage was emotional control.Jones understood that the moment a trader becomes angry at a position, good judgement begins to disappear. To remind himself of this, he kept a simple sign behind his desk that read: Losers Average Losers.The message was straightforward. When a position moves against you, the natural temptation is to buy more and prove yourself right. It feels decisive and like conviction. More often than not, it is simply frustration looking for an outlet. Instead of accepting that the market might be telling them something, the investor attempts to force the issue.Jones trained himself to do the opposite. Rather than fighting the market, he accepted mistakes quickly, cut losses and moved on. He understood that successful investing is not about winning every argument. It is about recognising when there is no argument to win.The virtue that counters wrath is patience. Not passive waiting, but the ability to remain calm when events do not unfold as expected. Patient investors understand that the market owes them nothing. They do not demand immediate validation, nor do they take disagreement personally. When new information arrives, they adapt.The patient investor sees a setback as data. The wrathful investor sees it as an insult. One learns from reality; the other argues with it. In the long run, the market has little mercy for those who cannot tell the difference.Some advice. When an investment is behaving differently to how you expect or wish, don’t take it personally.Subscribe now