The U.S. and much of Europe currently wages a “War on Terror” in the hills and mountains of Afghanistan. While the war in Iraq has always been controversial, the war in Afghanistan never was. It is a bipartisan war. Both the left and the right assumed we had to do “something” after the bombings of 9/11.
The Democratic Presidential candidate Obama pledged renewed focus on the war during his campaign. He believed that the war in Iraq had been a distraction from the real war against terror in Afghanistan. As President, Obama more than doubled the troops in Afghanistan from around 32,000 when he took office in January to around 68,000 now.
The question many now ask is: “Did Obama make the right decision? Should he have increased the troops in Afghanistan?”
The natural human reaction is to judge the decision on the basis of the progress made so far. So, many on the left judge that Obama was wrong since there seems to be no political progress and the military is now calling for even more troops. Many on the right meanwhile support an increase in troop levels since they believe it will assure American victory.
The trader’s perspective is to judge decisions on the basis of the quality of the decision itself. Trader’s know that decisions made under uncertainty often end up with bad outcomes.
Trader’s also know that once a trade is made, if the market doesn’t act right, then you should get out. That’s the whole rationale behind the stop loss. It is better to take a small loss than to keep losing money by staying in a losing position.
A trader would have a stop loss for our engagement in the war. If a particular strategy isn’t working, the thing to do is to change strategies, not continue on with the old strategy hoping that things will turn around. This is as true in warfare or international relations as it is in trading.
Me personally? I think Obama’s decision to send more troops to Afghanistan was a fine decision at the time. Afghanistan was the forgotten war that was neglected in favor of the more newsworthy war in Iraq. It was reasonable to conclude that we had not properly supported the efforts in Afghanistan and that a significant increase in troop levels there might get violence under control like the “surge” had done in Iraq. So Obama changed the strategy with the hope of improving the conditions in Afghanistan.
Subsequent to that decision, however, events have shown that sending more troops hasn’t helped much. We now have a resurgent Taliban and the U.S. backed government lost considerable legitimacy due to the way the recent election was conducted. It appears that rather than fighting against a clear enemy, we are now fighting on one side of a civil war. Al Qaeda has long fled Afghanistan.
It is time to cut losses and change strategies. A decision was made. It didn’t work out. The wise thing to do is to recognize reality and change course. Doubling down in hopes that the situation will get better is what rookies do.
A trader cuts his losses.
Trading From Your Gut
Way of the Turtle
Inside the Mind of the Turtles
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