David Whyte, the noted Anglo-Irish poet, said this in a 2019 interview with Krista Tippett* –
One of the interesting qualities of being human is, by the look of it, we’re the only part of creation that can actually refuse to be ourselves. As far as I can see, there’s no other part of the world that can do that. The cloud is the cloud; the mountain is the mountain; the tree is the tree; the hawk is the hawk. The kingfisher doesn’t wake up one day and say, “You know, God, I’m absolutely fed up to the back teeth of this whole kingfisher trip. Can I have a day as a crow? You know, hang out with my mates, glide down for a bit of carrion now and again? That’s the life for — ” No, the kingfisher is just the kingfisher.
And one of the healing things about the natural world to human beings is that it’s just itself. But we, as human beings, are really quite extraordinary in that we can actually refuse to be ourselves. We can get afraid of the way we are. We can temporarily put a mask over our face and pretend to be somebody else or something else. And the interesting thing is then we can take it another step of virtuosity and forget that we were pretending to be someone else and become the person we were on the surface at least, who we were just pretending to be in the first place.
This is a great lesson to take as we dip our toes into a new year.
As in life, so in investing, we often wear masks and pretend to be someone else. We listen to others except our own selves while making investment decisions. And now with the plethora of voices all over traditional and social media that tell us what to buy and when to buy, we are always second guessing our internal voice that may suggest us to do something else.
In fact, we hammer down that internal voice so much that it ceases to guide us as time passes.
The result – we venture beyond our circle of competence to buy investments we don’t really understand, we overpay for stocks because others are overpaying (and so it does not seem like overpaying), we trade in and out of stocks because others are doing it and making money at that, and we start believing that investing in stocks is an easy way to get rich quick (which it often seems).
In trying to emulate others, we sacrifice the one edge we inherently have in the market – our unique perspective. This perspective, shaped by our experiences, temperament, and goals, is not a weakness, but a strength. When we let others dictate it, we lose the ability to think clearly and rationally, replacing it with herd mentality.
Gradually, our conviction is someone else’s, our stocks are someone else’s, our mistakes are someone else’s, and we become investors we never wanted to be.
Noted financial writer George J.W. Goodman – who used the pen name of Adam Smith – wrote this in his wonderful book, The Money Game:
If you don’t know who you are, this is an expensive place to find out.
By “this,” Goodman meant the “stock market.”
When it comes to investing to build wealth (not to make money fast), it’s a very personal game.
The risk you can take is personal.
Your financial goals for which you invest, are personal.
Your time horizon is personal.
It’s also worth noting that knowing who you are as an investor doesn’t mean stagnation. Markets evolve, and so should we. But this evolution should be rooted in self-awareness, not mimicry. The more clearly you define your investment philosophy – and stick to it – the less susceptible you’ll be to the noise and short-term distractions.
If you understand this well, and play the game you understand well, the stock market can be a wealth creating machine for you over a period of time. Else, you will come to regret why you came here in the first place.
So, like David Whyte may have advised, be the investor that you are. Remove the mask that is not you. Because when you do that, you will reach the real you.
And remember, the real you doesn’t have to be perfect – just honest. Perfection is a trap that convinces us to seek certainty in an uncertain world. Investing, like life, is messy, full of unknowns and unexpected turns. Accepting that imperfection is where wisdom begins.
Also, when you get that mask off, you may feel vulnerable, but you will be surprised how brave you will feel when you start trusting your own vulnerability.
That – bravery in the face of vulnerability – is the secret sauce of sound investing (and, of course, a happy life).
And that’s the best advice I can offer you as we move into 2025.
* The Conversational Nature of Reality – David Whyte
Classroom Course in Value Investing
Admission is now open to the February 2025 batch of my most comprehensive classroom course in Value Investing, titled – Value Investing Blueprint.
This residential course is scheduled to be held from 27th February to 2nd March 2025 at the campus of Pune-based FLAME University. The last date to apply is 15th January 2025.
Click here to read more and apply if you are interested in joining this course.
Since it’s a classroom course, seats are limited.
The course will take you through the entire process of practising value investing to identify long-term wealth-creating stocks. This includes helping you:
- Create the right value investing mindset and build a behavioural framework to avoid biases and create the right investment thought process.
- Assess business quality – separating good from gruesome
- Analyze financial statements to find well-performing businesses
- Calculate intrinsic valuations using various methods
- Identify competitive moats and whether they are sustainable
- Build a portfolio of sound, wealth-creating businesses
Click here to read more and apply if you are interested in joining this course.
That’s about it from me for today.
If you liked this post, please share with others on WhatsApp, Twitter, LinkedIn. Or just email them the link to this post.
If you are seeing this newsletter for the first time, you may subscribe here.
Thank you for your time
—Vishal