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Before you read this letter, I want you to think about one of the most uncomfortable yet constant companions every investor lives with, which is regret. It is the persistent voice from within that reminds you of the stock you sold too early, the opportunity you missed, or the mistake you refused to correct. I’ve lived with it for years. This letter is my attempt to speak directly to that old, unwelcome friend. I have a feeling parts of it might feel familiar to you too.
Dear Regret,
You and I have known each other for quite a while. I never invited you into my life, or as an investor, but somehow, you always managed to show up like that neighbour’s cat that strolls into the house, makes itself comfortable on the couch, and looks at me as if I should be grateful for its company.
I remember our first serious encounter. I had sold a stock for a good 400% profit in three years, feeling disciplined and rather pleased with myself. I’d followed the “be rational” rulebook: don’t get greedy, book your gains. But then the stock doubled, and then doubled again, and again. And there you were, sitting beside me, whispering in that infuriating voice, “See? You thought you were smart.” That was the day you moved in, and you’ve been renting space in my head ever since, without paying anything as rent.
Over the years, you’ve shown up in all sorts of moments. You were there when I hesitated to buy a wonderful business because the market “looked expensive,” and then watched it rise for years. You were delighted when I stubbornly held on to a bad business, telling myself, “I’ll regret selling now if it bounces back tomorrow.” You were practically dancing with joy when I ignored an idea I had researched well, only to see it become a market darling while I watched from the sidelines.
I now know you’re not just a passing emotion, but a full-fledged behavioural bias. In fact, experts also have a name for it: Regret Aversion Bias. It’s the tendency to avoid making decisions because we fear the pain of future regret.
So, under the garb of this bias, you make me second-guess selling a stock because I can already imagine the pain if it rallies after I sell. You stop me from buying a great company because I picture the embarrassment if it falls right after I do. Sometimes, you paralyse me into doing nothing at all. The irony, of course, is that in trying to avoid you, I often end up inviting you in anyway.
You’ve taught me that regret comes in two flavours. First is regret from action, like when I bought a hot “next big thing” and watched it fall 50%. You show up quickly then, saying, “Couldn’t help yourself, could you?”
The second, and far worse, is regret from inaction, when I do nothing, and the stock I spent months researching becomes a 10-bagger without me. That’s when you are at your most insufferable.
If I’m honest, you’ve cost me both money and peace of mind. Yet, despite your annoyances, you’ve taught me some valuable lessons.
First of all, you’ve humbled me. Every “should have bought” and “shouldn’t have sold” reminds me that investing isn’t about knowing everything but about surviving long enough to be right often enough.
You’ve also pushed me to value process over outcome, because chasing perfect results is the fastest way to let you dominate my decisions. I now keep an investment journal where I write down my reasoning before every buy or sell. When you show up later, I revisit those notes and remind myself, “I made the best decision I could with the information I had.” That makes your voice a little softer.
I’ve also learned to recognise you in the form of regret aversion, before it traps me. When I feel frozen, I ask myself, “Am I avoiding this decision because it’s wrong, or just because I’m scared I’ll regret it?” That one question has saved me from a few painful mistakes.
I no longer expect to avoid you completely. In fact, even the best investors live with you. Warren Buffett has his regrets about missing Amazon and Google. Charlie Munger has his list of “what could have been” investments. If they can live with you, I figure I can too.
The truth is that you are part of the price of admission to the investing game. You’ll always visit. There will always be a stock I sold too soon or a winner I missed. The market will always create scenarios where someone, somewhere, is making more money than me. Accepting that has been liberating. I’m learning to greet you with less panic and more curiosity. When you appear now, I ask myself, “Was my process sound? Would I make the same choice again with the same information?” If yes, I make you a cup of tea, let you scold me for a bit, and then show you the door.
I know I will continue to make mistakes. I will sell too early and buy too late. I will hold some losers and miss some winners. But I hope our future visits will be less dramatic.
Maybe you can move from being a tormentor to being a coach, offering lessons without paralysing me. And maybe I can live with you more gracefully, knowing that the real victory in investing is in surviving with humility and a process I can trust, not in avoiding regret altogether.
So here’s to you, dear Regret. Thank you for the hurts, scars, and the lessons. I’m trying to live with you in peace, but I’d like to make fewer memories with you in the years to come.
Yours in uneasy friendship,
Vishal
Two Books. One Purpose. A Better Life.
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