when you get too close, you only hear the noise

There are some very interesting statistics about Novak Djokovic that can teach us about noise versus signal.

reading it left to right

If we read the stats for points followed by the matches (i.e., points won → matches won), the observation by the optimist in you is that small improvements in the short term lead to massive benefits in the long run. The data is indisputable: by "improving" the number of points won by 6 percentage points, Djokovic went just another starving tennis player to the most dominant in the world. His win rate from 45% to 88%.

What is not revealed to us is the cost of moving by 1 percentage point. The optimist (and those who enjoy watching Ted Talks in YouTube) call it "small improvement" but it's unseen by us and likely extremely costly or, in the domain of tennis, even impossible if your name is not Novak.

reading it right to left

There is a different read, one that I find a lot more insightful: points won ← matches won.

Beyond doubt, tennis is a domain in which skill is necessary to succeed. Now, we take the most skilled player (behind Federer and Rios, of course) in his most dominant year, and start counting points in matches (imagine watching the points change in a scoreboard, without actually seeing players) and yet we barely see a thing:

he only wins 55% of the time.

This is because in small intervals, we only see the noise (the variance).

checking your brokerage account 170 times per day

On terrain reconnaissance: consider that playing piano admits a lot less randomness than playing tennis. And consider that playing tennis allows for a lot less randomness than "investing" in the market.

What do you think you see when you look at your brokerage account multiple times per day?

You only see noise, and every unfavorable move causes psychological pain. It can also cause you to change course based on purely faulty signals.

New Year Resolution: continue not reading the news, and review your accounts every six months, no more.