Jawad Mian Profile picture
17 Nov, 13 tweets, 2 min read
1) Of all the early warning signs that can help prevent investment disasters, one stands out.

COMFORT.
2) It’s our natural tendency to seek comfort; but in investing, when we tend to get comfortable in our views, feel our portfolio is safe, experience tells us something bad is about to happen.
3) Our comfort zone is a state of mental security where our uncertainty and sense of vulnerability are minimized.

Where we feel we have some control.
4) But the market is not stable, dependable, or how we want it to be.

So this actually creates behavioral conditions that maximize risk.
5) When markets move in a familiar pattern that seems to match our script, we become complacent and do not challenge our thinking.

Bad habits form.
6) Without the sense of unease and dread that comes from discomfort, we no longer seek contradictory evidence and opinions.

We no longer actively pursue truth.
7) In 1908, psychologists learned that in order to maximize performance, we need a state of relative anxiety—a space where our stress levels are slightly higher than normal.

This space is called “Optimal Anxiety,” and it’s just outside our comfort zone.
8) By exposing ourselves to the vagaries of the market, investing is already an anxiety producing activity.

So if comfort creeps up after a period of strong returns we savor it. This lulls us into thinking we have it all figured out.
9) The problem is performance is a lagging indicator, not a leading one.

No matter in how great a position we are, we should beware of comfort if we want to stay consistently on top.
10) So find a way to break out of your echo chambers.

Engage the people you disagree with, to challenge your own thinking and because sometimes, they may just be right.
11) It’s an uncomfortable feeling when the market does not seem to work rationally by our standards.

It means our understanding of how it ought to work is probably defective; and we must work harder to develop a new understanding.
12) But it is only by pushing through discomfort that makes
intellectual freedom and growth more possible.

Why?

Because it requires our deepest level of thought, attention, and presence.
14) The wise old Rumi knew this, for he said:

“Run from what's comfortable. Live where you fear to live."

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More from @jsmian

9 Sep
1) Man, I didn't know this story about Muhammad Ali, what a lesson:

Taken entirely from @DailyDadEmail.
2) You might not think of Muhammad Ali as someone who needed anyone to believe in him, but that’s because you only saw him later in life.
3) You saw the cocky boxer, the brilliant self-promoter, the master of his craft, the fearless warrior.
Read 17 tweets
28 Aug
1) Every decade, there is a theme that captures the zeitgeist and turns into an investment mania.
2) It was gold in the 1970s, Japan in the 1980s, Nasdaq in the 1990s, China and commodities in the 2000s, and software in the 2010s.
3) Now that climate change has become a political and economic priority, I believe the global race to zero emissions is the investment zeitgeist for this decade.
Read 4 tweets
7 Aug
Fifteen years ago, I blew my first shot at joining the buy side.

It was the first time I learned about humility. 🧵
1) I was in the final round for an analyst position with CIBC Asset Management in Toronto.

After a candid back and forth, the interviewer posed his final question:

“What’s the most important trait for a successful investing career?”
2) An image of my father flashed into my mind.

“Hard work and discipline,” I replied.
Read 24 tweets
5 Aug
What makes Warren Buffett the greatest investor of all-time?

He is the only infinite-minded investor in the stock market, which is an infinite game. 🧵
1) An infinite game is not bounded by time and the objective is not winning but ensuring the continuation of play.

An infinite game continues with you or without you.
2) Investing is an infinite game. But most people play with a finite mindset. That’s a problem.

Finite play in an infinite game is contradictory.
Read 22 tweets
25 Jul
1) The way we breathe is inextricably linked to the way we live.

I’m embarrassed how long it took me to figure this out.

Given my sinus I’ve been breathing poorly my whole life.

What I’ve learned 👇🏼👇🏼👇🏼
2) Breathing, with awareness and intention, sits at the heart of spiritual practice.

To let one breath go, say the Sufis, without being conscious of it is a sin.
3) Our daily intake is twenty-five thousand breaths, and we may well not even notice one.
Read 23 tweets
22 Jul
So Branson went to 86.1 kilometers of altitude and Bezos went to 107 kilometres.

This reminds me of the late 1920’s race to build the tallest building in Manhattan.
Walter Chrysler planned an 808-feet tall monument embellished with gargoyles based on radiator ornaments from Chrysler’s cars.
But once a rival publicized a slightly higher structure, Chrysler had his architect secretly build a 185-foot spire which would bring the height of the Chrysler Building to 1,046 feet.
Read 5 tweets

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