April 12, 2022
What is investing? Or trading, for that matter? What about building a startup to a desired exit? We give up comfort today for something greater tomorrow. The best dealers know how to deal in discomfort.
Nobody likes pain. We don't like discomfort either.
Today, we don't have to worry about it in most cases. If we are hungry, we can open the fridge and snack. If we need to know something, we can unlock our phones and find out right away. If we have a headache or feel sore, Advil can get rid of that in a half-hour.
In life, that's a good thing.
It can be a disadvantage in business if you don't seize the opportunity.
Investors deal in discomfort. The very principle of investment is where I take something of comfort, my money, and lock it up somewhere for a while with the expectation that it will return me a greater level of comfort in the future.
We put money aside for pension, often parting with our cash for a half-century to get that return. We spend hours on end every day building a startup, sacrificing time with friends, movies, even health and exercise to perform an even greater exercise on our exit options.
THERE WERE PLENTY OF MOMENTS WHEN I SCREAMED IN AGONY when I was in the army. The drill instructors all said the same thing, “Work through the pain.”
It was the first time anyone told me to accept and manage discomfort.
I could run faster, work harder, and operate on less sleep. This new ethic came with me to the workforce. I didn't sweat when the boss talked about working all night on something; I didn't flinch.
As life becomes more comfortable, this attitude is beginning to feel more voluntary than required.
Discomfort is when you have a terrible trading position, and the best move is to sit tight. Avoiding pain would be to double your position so it just “needs” to go up half as much to recoup your losses. It would be selling your position right away and guaranteeing the losses.
To maintain comfort, we expose ourselves to a lot of self-destructive actions.
It's that one or two trading days that you stay steady under fire that can make the difference between the stock stabilizing at the new level or bouncing off into higher territory.
This is why intelligence has little to do with investing.
The naive think it's about how smart you are. The successful know that this is about nerve.
It's about patience.
It's about keeping your eyes forward when sirens are blaring, and red lights are flashing in all corners.
How do you develop this skill?
Do you put your hand over an open flame and try to keep it there as long as you can?
There are lots of ways to build up endurance. It doesn't have to be dangerous, damaging, or even disturbing.
Waking up at 5 AM each morning is an exercise in endurance if you are used to getting up at 8. Even if you get up a five every morning, come the cold months when you wake up to total darkness, it's an exercise in endurance.
If you can continuously push the confines of your level of personal endurance, you will be surprised at what other boundaries you can push beyond.
There's more so stay tuned.
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