1/ March has been stressful. Stocks had their worst week since 2008. Counter to our view, treasury yields reached historic lows and oil crashed. And, to top it all off, the coronavirus outbreak roiled our desert gathering.
2/ What's frustrating is that we were actually expecting this to happen. As we asked in January, "Could we be seeing a buying climax? Rather than a melt-up, what comes next is an ominous churning pattern followed by a truly cleansing downside correction."
3/ There was little support for this view as I shared it with peers during our London dinner. Then visit to San Francisco and ebullience during the GS Tech Conference further strengthened my belief. 
4/ But clarity of perception is one thing and accuracy of response another. The mistake I made was that I viewed the rise of the radical left in US politics as the key event risk in 2020, which would be priced later in the year.
5/ We also incorrectly relied on asset prices during past pandemic outbreaks to guide our forecasts, ignoring or rather forgetting the big picture view from January.
6/ Worst of all, I wasn't fast to adapt or adjust to the new playing field, responding decisively and without hesitation when the market moved against us. I'm so pained by this as I know I can do better.
7/ "Deep practice is built on a paradox," @danielcoyle wrote in The Talent Code, "struggling in certain targeted ways—operating at the edges of your ability, where you make mistakes—makes you smarter..."
8/ "Or to put it a different way, experiences where you're forced to slow down, make errors, and correct them—as you would if you were walking up an ice-covered hill, slipping and stumbling as you go—end up making you swift and graceful without you realizing it."
9/ I hope this is true. Year after year, the viability of Stray Reflections rests on our ability to see the unforeseen and I failed to live up to that challenge. As William Blake wrote, "Hindsight is a wonderful thing, but foresight is better."
10/ What I have learned through this is prospective hindsight, also called the pre-mortem technique, is one way to prepare for stress before it happens. By looking into the future and imagining how it may unfold, we can overcome blind spots and evaluate a course of action.
11/ Our brain under stress releases cortisol, which increases our heart rate, it modulates adrenaline levels, and this clouds our thinking. The pre-mortem technique gives us a chance to be objective and feel secure enough in our decision making in real time.
12/ We cannot eliminate the stress in our lives, but we can think ahead and at least prepare for it. In a typical stress response, our heart rate goes up and our blood vessels constrict.
13/ This is why chronic stress is often associated with cardiovascular disease. But what makes stress harmful isn’t the basic physical reaction that causes our heart to pound and palms to sweat, but our belief that this is a bad feeling, according to @kellymcgonigal.
14/ When the stress response is viewed as helpful—the pounding heart is preparing us for action, breathing faster is no problem as it’s getting more oxygen to our brain—a Harvard study found that our blood vessels stay relaxed.
15/ This is a much healthier cardiovascular profile and doctors say it looks like what happens in moments of courage and joy. In other words, when we change our mind about stress, we can change our body’s response and transform our experience of stress.
16/ As William James once said, “The greatest weapon against stress is our ability to choose one thought over another.”
17/ @kellymcgonigal suggests a three-step approach to create the “biology of courage”: acknowledge stress when we experience it, welcome the stress by recognizing that it’s a response to something we care about, then make use of the energy it gives us.
18/ Stress can activate strength and can be used as a signal to the body to help us rise to the challenge. That is what we must do now. That is what I must do now. Cui servire est regnare.
