We're Living in the Greatest Time in Human History

At HX Research, we spend a lot of time thinking about human nature and psychology.

While the technology of financial markets has changed beyond anything anyone could have imagined in my two-plus decades in them, the one aspect that has yet to change is that these markets are ultimately a reflection of human activity.

Sure, there might be more "quantitative" strategies in the form of sophisticated computer programs and algorithms... But the vast majority of the activity still comes from humans. (And remember that people still oversee those programs!)

As a result, I spend much time thinking about how the human brain works and how it has evolved. I'm particularly interested in how human psychology influences investment decisions and the markets.

Beyond just the financial markets, human psychology influences every aspect of your life – business, friends, family, etc.

This is why understanding trading psychology is beneficial to help make you money and lead your life.

I have frequently discussed how human nature tends to outweigh negative factors. We're biologically programmed to this bias.

In ancient times, if you had a good meal, you lived another day. If a sabretooth tiger ate you, your genetic line was over. Biology appreciates a good day... but it wants to emphasize propagating the genetic line over everything else!

With the expansion of the Internet and social media and our ability to engage with a massive volume of information 24 hours a day, this bias has become overwhelming for many of us.

It's easy – in fact, it's human nature – to take the constant barrage of harmful activity and think the world is falling apart.

But if you take a step back and, interrupt your body's reaction and look at the data, the reality is much different.

My argument has long been that every moment we live is the single best moment in human history. Even if something terrible happens that day, when you look at the aggregate experience of humanity, every single day is the least suffering, the most enjoyment, and the most extended lives as a percentage of the total human experience.

I realize this message isn't very popular – it doesn't fit with what your body and social media want to tell you.

But it's true...

Back in July 2022, I found an article that went through a great list of why this statement is true and with the data to back it up.

More recently, I read an article from another great author – Ben Carlson – that gave a similar list... It has 50 data points that show these are extraordinary times.

I won't go through all 50 points here, but I'll briefly mention some of my favorites...

• Human beings' life expectancy has increased incredibly in the past century and even across the last few decades.

• The likelihood of dying as a result of violence, natural disasters, disease, etc., has plummeted massively.

• Education levels have gone up dramatically almost everywhere in the world.

• The amount of time we have available for leisure has increased to an extent that would be fantastical to people a century ago.

• The number of people globally living in true poverty is a tiny fraction of what it was 50 years ago.

You can read the full article for yourself for all 50 points – I'm sure many of these details may surprise you!

So why do I mention these positive developments in a newsletter about trading and investing?

Let's get back to human psychology...

I get it... In many ways, things seem ominous out there.

But if you let the negativity overwhelm your decision-making – as your body forces you to do – the likelihood that you can execute a sound strategy decreases substantially.

This isn't just about sticking to your plan but also about your outlook.

One of the most potent influences I have seen in trading, investing, business, or life is the power of positive thinking!