Hedging Your Bets

Confidence is key in trading—but sometimes, it pays to hedge your bets.

Watching a few stocks nosedive last week—Nike in particular—reminded me of a time I should’ve done just that.

As many of you know, I’m not a fan of pronouncing American versions of English words. A few classics spring to mind: alumi-num instead of alumin-ium, yo-gurt instead of yog-hurt, and of course, Nik-ee instead of Nike.

This came to a head when my wife claimed I wasn’t just saying the “English version”… I was wrong, full stop. Confidently, I bet her dinner that everyone in England pronounced it my way. To prove it, I rang Nike Town on Oxford Street.

The phone rang. A lady answered:
“Hello, Nik-ee Town London, how can I help you?”

That was a pricey dinner.

But in trading, overconfidence can cost a lot more than a meal. Whether it’s due to blind belief or a lack of research, it’s worth pausing to get another perspective—before placing a trade (or a bet with your wife) that’s doomed from the start.