Literally everything I've read of any value about investing says this: Learn to be humble, and admit when you're wrong.
This is just another round of too much gyan, so excuse my soapbox-standing. There's a reason they say you must cut your losses and let your winners run. Because you will lose. And your behaviour, when you lose, defines what you will eventually make of yourself.
This is true of life too. Your behaviour in adversity defines you. Many of us have never really faced adversity. We've won in our schools, in our degrees, in our jobs. We just don't lose. So when you see your delicately analyzed stock go right down the tube: How can this be?
The market is wrong, you think. Because you can't be, since you've done all the hard work, and everything was exactly the same last month, but the stock's down 20%.
You've even heard the promoter on a TV channel. He's trying really hard, and seems so genuine! My assessment of him cannot be that wrong, because I'm so good at recognising talent, you think. Because you are, otherwise. Except that in the world of stocks, you are not.
It's the financial market. People dress up pigs in lipstick. They don't do it for fun. It's an occupation. You will be fooled, because they've seen thousands of people like you, who believe their eyes can actually see. And they know how to lead you on.
And because of that, the failure hits you hard. It's not because you can't fail. It's because you can't fathom that you can, and because you care about winning all the time.
Investing is more about learning to lose well than it is about winning.
Investing is more about learning to lose well than it is about winning.
We've been an incredibly lucky set of people, seeing nearly two decades of the markets going up, and in the last few years, haven't even seen a 30% correction. The hubris this can generate is humongous. I'm right because I haven't been wrong.
This is a scary cocktail - of tepid markets, of investor overconfidence, and of the relative lack of deep losses. They're reflexive, too. One thing will impact everything else.
The next decade, I think, will be of the three things that humility really means:
Accept, Survive and Adapt.
When you accept your losses, you won't double down. That lets you survive. Which means you get to do it again, but not with the same mistakes.
Cheers!
Accept, Survive and Adapt.
When you accept your losses, you won't double down. That lets you survive. Which means you get to do it again, but not with the same mistakes.
Cheers!
