Accepting loss and pain in life and investing

Before I start today’s post, I have a quick announcement to make.

I run personal workshops on Value Investing in –

  • Bengaluru: Sunday, April 7
  • Bombay: Sunday, April 14
  • Dallas (USA): Saturday, April 27
  • New York (USA): Saturday, May 11

If you are in or around these cities and want to wait, please register here.


Embrace the pain, in life and investing

I recently read a newspaper headline that called a 1% drop in the stock market a “bloodbath” and described how investors had to suffer the “pain” of losing a small portion of their wealth quickly.

It got me thinking about how our perception of pain and loss, especially in investing, has changed over the years. And it reminded me of my own journey with understanding and embracing discomfort.

I was the same way years ago. Even the smallest failure in life or the stock market felt like a major disaster. I was in constant denial of the pain, preferring to ignore it rather than face it. This fear of pain made me overly cautious and frankly, it caused me to miss out on a lot of opportunities to invest in great businesses.

One category was companies with a small amount of debt on their balance sheet. Since I have a great aversion to debt, I also avoided companies with even a small amount of debt on their balance sheet. While being uncomfortable with debt has helped me stay secure in my financial life, over time I’ve realized that I’ve also lost out on some great businesses because of this discomfort.

But then something clicked. I realized that discomfort and pain in all their forms are inevitable. It is not something to fear, but to understand and embrace. This change in perspective did not happen overnight. It was a slow process of learning from the best investors in the world and facing challenges head on instead of running away from them.

In my personal life, this has meant acknowledging difficult emotions and situations instead of sweeping them under the rug. These things were hard to face, but with each challenge I faced, I found myself growing stronger and more resilient.

And in investing, that meant redefining what a “blood bath” actually was. A drop in the stock market of 1% or even 10 or 20% was not the end of the world. It was a natural part of the investment cycle. I learned to look past the short-term pain and focus on the long-term gains. I began to see the losses as lessons, each one teaching me something valuable about the market and my risk tolerance. I learned to see investing as a way to make money and a journey with ups and downs. Losses were no longer just setbacks; they were lessons. With each failure, I was more prepared for the next decision.

This journey has taught me that raising your pain threshold – in life and investing – is essential. It’s not just about enduring the discomfort; it’s about accepting it as part of the growth process. As Kahlil Gibran said, pain in a way breaks the shell that closes our understanding, allows us to see things from a new perspective, learn and evolve.

So if you’re reading this and wondering about your relationship to pain and discomfort in life and investing, know that it’s a path worth taking. Know that it’s okay to feel overwhelmed at times. It’s okay to be afraid. The important thing is that you don’t let that fear hold you back. You embrace the pain, learn from it, and let it lead you to a stronger and wiser self.

As Jeremy Bentham, the 18th century philosopher, famously asked…

The question is not “can you think rationally?” or ‘can you speak?’ but ‘canst thou suffer?’

If you can suffer through the pain and discomfort that life and the stock market can sometimes throw at you, you may not end up with a lot of rich people… but a peaceful life.

What more do you want?

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