Summary
Introduction
Key Insight: Emotions are deeply rooted in our biology and psychology, and understanding them is crucial for personal growth and success in investing. This guide offers practical strategies for managing emotions, drawn from both personal experience and extensive research.
Part I: Theoretical Foundations
Key Insight: Emotions are the result of complex biochemical processes in the brain, and while they are powerful, they can be understood and managed. Key principles include the mind's preference for familiarity, the body's natural drive for homeostasis, the role of the parasympathetic nervous system in relaxation, and the habitual nature of certain emotions like anxiety and fear.
Part II: Experimentation Lab
Key Insight: Practical techniques for emotional management are essential for real-world application. Strategies like mindfulness, breathwork, reframing anxious thoughts, and using physical activity to shift focus are effective tools. The importance of experimenting with different methods to find what works best for you is emphasized.
Part III: Investing
Key Insight: Emotional stability is critical in investing. The "Pendulum of Emotions" illustrates how investors swing between optimism and pessimism, often leading to poor decisions. Recognizing where you are in the cycle and managing emotions like FOMO, overconfidence, and fear can lead to more rational investment choices.
Fear of Missing Out (FOMO)
Key Insight: FOMO can drive irrational investment decisions. The "Quick-List" strategy helps investors slow down and make more thoughtful choices, avoiding the impulse to jump on trends without proper research.
Overconfidence
Key Insight: Overconfidence, often fueled by short-term success, can lead to reckless decisions in investing. Maintaining humility, sticking to a proven strategy, and regularly reviewing past mistakes are important safeguards.
Fear
Key Insight: Fear in investing can cause short-term thinking and excessive caution, leading to missed opportunities. It's important to maintain confidence and a long-term perspective to counteract the paralyzing effects of fear.
Expectations
Key Insight: Unrealistic expectations can lead to disappointment in investing. Understanding that business growth is not linear and being patient with investments is crucial for long-term success.
Loss Aversion
Key Insight: Loss aversion can cause investors to hold onto losing investments for too long, hoping for a rebound. It's better to cut losses quickly and focus on more promising opportunities.
Anchoring
Key Insight: Anchoring to past prices or benchmarks can distort investment decisions. It's important to re-evaluate opportunities based on current conditions rather than past performance.
Confirmation Bias
Key Insight: Confirmation bias leads investors to seek out information that supports their beliefs, ignoring contradictory evidence. Actively seeking out disconfirming information can lead to more balanced and informed decisions.
Herd Behavior
Key Insight: Following the crowd in investing can lead to suboptimal outcomes. Independent thinking and thorough research are key to avoiding the pitfalls of herd mentality.
Be Self-Aware
Key Insight: Emotional self-awareness is crucial in avoiding rash decisions. Techniques like the HALT PS mnemonic (hungry, angry, lonely, tired, in pain, stressed) help identify when you're in a poor state to make decisions.
Delay Decisions
Key Insight: Delaying decisions, especially in investing, allows for more rational, less emotionally driven choices. Giving yourself time to reflect can prevent costly mistakes.
Don’t Beat Yourself Up
Key Insight: Investing is a long-term game, and perfection isn't necessary. Consistency and learning from mistakes are more important than always being right.
Conclusion
Key Insight: Emotional stability is a lifelong journey that requires continuous learning and practice. By keeping life simple and predictable, managing expectations, and maintaining a disciplined approach to investing, you can achieve greater emotional and financial stability.
Final Thoughts
Key Insight: Simplify your approach to life and investing, avoid unnecessary distractions, and stick to proven strategies. Writing down and regularly reviewing your emotional management techniques can help you stay on track.
Appendix
Key Insight: The appendix offers additional advice from various experts to further enhance your emotional and investment strategies.
Mastering Emotions: A Personal Playbook
This guide offers practical strategies for managing emotions in investing and life, drawn from personal experience and extensive research.
Here are some people and resources I relied upon for the basis of information shared. I’m doing this at the start because I’m truly grateful for their insights, and their direct or indirect contribution, if you want you can obviously skip this part.
Tribe of Mentors, Why Zebras Don't Get Ulcers, Dale Carnegie, Dimitris Markoulis, Stock Opine, Bogumil Baranowski, Andrew Brown, Shree Viswanathan, Financial Skeptic, David Park, Chris Mayer, Jake Taylor, Clay Finck, Gautam Baid, Christopher Tsai, Stig T. Brodersen, Rajeev Agrawal, CFA, Barry Schwartz, Diego Milano, David Bastian, Don Wharton, Roger Federer, Nikola Jokić, Christian Binder, Carlos García Serrano, Alen Juginović, Bradley James, Chris Bumstead, Investing with Tom, Miguel Milhao, David Park, Tilman Versch, Ian Cassel, CrashCourse, Rethink Stress Intervention, Wim Hof, Simon Sinek, Ricardo Ferreira.
Sorry if I missed anyone.
Disclaimer:
While not professional advice, these common-sense approaches have proven effective for me. Please remember I’m only 18 years old and still learning so I might have made a bunch of dumb mistakes in this piece of work. I’m human like everyone else and I’m not here trying to pretend I’ve mastered the art of dealing with emotions. Disclaimers apart let’s get into it.
Structure:
1. Theoretical Foundations: Essential concepts about human nature and emotional management.
2. Experimentation Lab: Actionable techniques for immediate application.
3. Investing: Taking what we learned and applying it to everyday stuff in investing.
This is a living document, evolving as I continue to learn and refine these vital skills. Join me on this journey of emotional mastery, where we'll explore time-tested ideas and experiment with practical solutions.
Part I: Theoretical Foundations
Before diving into practical techniques, it's important to understand the underlying concepts that govern our emotions. In this first part, we'll explore the theoretical foundations of emotional stability. By grasping these core ideas, you'll be better equipped to manage your emotions in both life and investing.
You know, I've been thinking a lot about emotions lately. It's fascinating stuff, really. Here's the thing: everything we feel, all our emotions, they're not some mysterious force. They're actually just chemistry in action. Our brains and nervous systems are like little factories, pumping out chemicals that make us feel certain ways.
Now, don't get me wrong - I'm not saying emotions aren't real or important. They absolutely are! But understanding where they come from can help us manage them better. It's like, most of our emotional responses are learned. We've been conditioned to react in certain ways to certain things. And if we can learn them, we can unlearn them too. It's not easy, mind you, but it's possible.
Take fear, for example. It's probably one of the most useful emotions we have. Back when our ancestors were out hunting woolly mammoths or whatever, that gut feeling of "Oh no, something's not right here" could literally save their lives. So these emotions, they're not good or bad in themselves. They're just... there. And our job is to figure out how to work with them, not against them.
I've been trying to come up with a strategy for dealing with emotions, and I've noticed a few things that seem to be true most of the time. Let me share them with you:
First off, our minds really don't like the unknown. They much prefer things that are familiar. It's like, "Hey, I know this situation. I can handle this." That's comforting to our brains.
Secondly, our bodies are always trying to find balance. It's called homeostasis - fancy word, I know, but it just means our bodies want everything to be stable and steady.
Third, there's this part of our nervous system called the parasympathetic system. When it's activated, it helps us relax. It's like the chill-out button for our bodies.
And lastly, a lot of those uncomfortable emotions we deal with - worry, anxiety, fear of missing out, envy - they're often just habits we've picked up along the way.
So, what do you think about all this? Does it make sense? Let me dive a bit deeper in each and everyone of these important facts.
The mind fears the unknown and loves what is familiar to it.
I've noticed that people who handle it well seem to have a few things in common. They're not trying to control everything – just the stuff that's happening right now. They've kind of made peace with the fact that they can't change the past or predict the future. And when they're faced with a big problem, they don't look for one magic solution. Instead, they break it down into smaller, more manageable steps.
Now, let's talk about that nervous feeling we get before big events. You know the one – before an interview, a competition, or an exam. It's that fear of the unknown that gets us. And hey, it's totally normal. We all go through it. But I've found some ways to deal with it that might help.
First off, practice. I mean, really practice. Make that scary event as familiar as possible. If it's an interview you're worried about, do mock interviews with friends or family. When I had a big exam coming up, I went all out. I even had a software make exam noises – you know, walking around, turning pages, coughing. After doing this over and over, by the time the real exam came, it felt like just another day.
But here's the thing – even with all that practice, you might still feel some nerves. That's where the second part comes in: reframing those feelings. Instead of thinking "Oh no, I'm so nervous," try telling yourself "I'm excited about this opportunity." It's a small shift, but it can make a big difference. It's like you're using that energy to sharpen your focus instead of letting it throw you off.
I've learned a lot from watching Olympic athletes and other high-level performers. These folks deal with pressure on a whole different level. Many of them talk about still feeling nervous, but they've learned to channel those feelings into their performance. They focus on what they've practiced and tune out the distractions.
Take Rafael Nadal, for example. He's said he feels nervous before every single match. But you'd never know it watching him play, right? He uses positive body language to take control of the situation and embraces those pre-match jitters.
So, yeah, it's all about practice and perspective. We might not be able to get rid of those nervous feelings entirely, but we can definitely learn to work with them instead of against them. What do you think? Have you found any strategies that work for you when you're feeling stressed or anxious about something big?
The body has a natural tendency toward homeostasis (equilibrium).
So, you know how our bodies are always trying to keep things balanced? Scientists call this homeostasis, but I like to think of it as our body's inner peacekeeper. It's pretty smart, actually.
Now, when we're dealing with tough emotions, most of us tend to do one of two things. We either try to squash the feeling (like, "Nope, not feeling that!"), or we distract ourselves (hello, mindless scrolling on our phones!). But here's the thing - neither of these really works in the long run.
Trying to force an emotion away is like trying to hold a beach ball underwater. The harder you push, the more it wants to pop back up. And distraction? Well, that's just putting a band-aid on a broken arm. The emotion is still there, lurking, waiting for you to stop watching cat videos.
So what can we do instead? This is where that homeostasis idea comes in handy. Our bodies naturally want to find balance. It's not about staying the same all the time - life's too messy for that! It's more about adapting to whatever's going on.
The trick is to be a bit more like a surfer riding a wave. Instead of fighting the emotion or pretending it's not there, we can just... feel it. I know, I know, it sounds too simple. But hear me out.
There’s this popular fancy term, mindfulness, but at the end of the day it's not about clearing your mind or becoming super zen. It's just about noticing what you're feeling without beating yourself up about it. Like, "Huh, I'm feeling anxious right now. That's interesting."
This isn't some new-age mumbo jumbo. It actually goes way back to Buddhist teachings. They talk about thoughts and emotions like waves in the mind. The idea is, don't try to stop the waves. Just let them come and go. Don't get too bothered by them.
“Don't attempt to forcibly stop your thoughts. Allow them to come and go freely. This approach avoids the disturbance they may cause. Understand that these thoughts are merely your mind's waves. By not being troubled by them, they will naturally settle into serenity within a short period, typically five to ten minutes.” - Zen Mind Beginner's Mind note
There are also other coping styles:
1. Problem-Solving: Evaluate whether it's more effective to alter the stressor or your perception of it.
2. Emotional Acknowledgment: Simply admitting that you're emotionally affected can reduce stress. (Similar)
3. Social Support: Leaning on relationships and social networks can alleviate stress.
Flexibility in switching strategies is crucial. As Antonovsky, a pioneer in health research, emphasized, effective coping involves both fixed rules and adaptable strategies. Often, when traditional coping methods fail, trying something new is necessary, even if it’s challenging.
Stimulating the parasympathetic system helps relax.
Now let's chat about something pretty interesting - our nervous system. Don't worry, I'll keep it simple and fun!
So, there's this part of our nervous system called the parasympathetic nervous system, or PNS for short. Think of it as your body's chill-out button. It's all about rest and digest - you know, those times when you're relaxed and your body's just doing its thing.
Now, why should we care about the PNS? Well, it's like your body's energy-saver mode. It helps keep everything balanced and running smoothly. Remember that homeostasis thing we talked about earlier? The PNS is a big part of that.
Here's the cool part - there are some super simple ways to give your PNS a little boost:
1. Deep breathing: It's like a massage for your vagus nerve (don't worry about what that is, just know it's important).
2. Relaxation techniques: Think meditation, yoga, or tai chi. Basically, anything that helps you unwind.
3. Physical comfort: Massages, warm baths - anything that makes you feel cozy.
4. Getting enough sleep: Your body loves a good snooze.
5. Eating well: Yep, even digesting food can help, that is why during times of stress some people tend to put on weight.
6. Cold exposure: Splash some cold water on your face or try a cold shower if you're feeling brave.
7. Hanging out with people you like: Good vibes are good for your PNS.
You might have heard about some of these before. That's why things like meditation and cold showers have been all over the media lately - they really can help you feel more relaxed!
Personally, I'm a big fan of breathwork (there's this cool technique called Wim Hof breathing) and power naps (15min - 1h ideally). But everyone's different, so you might find something else works better for you.
One last thing - don't stress about trying to do all of these perfectly in a to-do list style. Remember the 80/20 rule? It suggests that 80% of your results come from 20% of your efforts. So focus on a few things that work for you and do them consistently. Keep the rest in your back pocket for when you need them.
Since I’m not a scientist I highly recommend watching this Crash Course Anatomy video if you want to dive deeper into this topic Parasympathetic Nervous System: Crash Course Anatomy & Physiology #15
Most emotions such as worry, anxiety, FOMO, envy, and others are a product of habit.
“The Chains of Habit Are Too Light To Be Felt Until They Are Too Heavy To Be Broken” - Warren Buffett
You know, it's funny how our emotions can become habits, right? And not just that - our other habits can actually make our emotions stronger or weaker. It's like this big, interconnected web.
So, let's talk about some basic stuff that can really help us manage our emotions and stress better. It's not rocket science, but it's super important:
1. Skip the smokes and go easy on the booze. Your body and mind will thank you!
2. Get moving! Exercise is like a magic pill for stress.
3. Try to keep your weight in check. It's good for your overall well-being.
4. Look after your mental health. Depression is no joke.
5. If you're married, work on keeping it warm and stable. Good relationships are like emotional armor.
6. Develop a resilient way of coping. Be outgoing, connect with people, and try not to sweat the small stuff.
Now, let's dig a bit deeper and talk about how we can spot and break those pesky emotional habits. Let's use worry as an example, because who hasn't been there, right?
First, you've got to figure out if you're stuck in a worry loop. Ask yourself:
- Are you always putting off living in the present because you're anxious about the future?
- Do you spend a lot of time dreaming about a perfect scenario that never seems to happen?
- Are you constantly regretting things from the past that you can't change?
- When you wake up, are you excited about the day, or does worry cloud everything?
If you find out you're caught in a worry habit (or any emotional habit), the next step is to accept it. Don't beat yourself up! Just calmly think about how you can improve things right now. It's about taking control and actually doing something, not just spinning your wheels.
Here's a simple problem-solving approach:
1. What's the problem?
2. What's causing it?
3. What are all the possible solutions?
4. What solution do you think is best?
Lastly, it's all about your overall attitude towards life. Stay active, think about probabilities (don't waste energy on unlikely stuff), accept the past, try to be cheerful, be grateful, judge yourself by your own standards, and make relaxation a habit. If you can do these things, you're setting yourself up to handle pretty much any emotional habit that might be dragging you down.
Part II: Experimentation Lab
"To the man with only a hammer, every problem looks like a nail." - Charlie Munger
Now that we've laid the groundwork by understanding the theory behind emotional stability, it's time to move from concept to action. In the next section, we'll step into the 'Experimentation Lab,' where you'll find practical techniques you can start applying right away. These strategies are designed to help you experiment with and refine your emotional management skills in real-world situations.
You know how sometimes it feels like your brain is just a jumbled mess of thoughts? Well, a bunch of really smart people have some pretty cool ideas on how to deal with that. Let me share some of the highlights with you.
First off, have you ever thought about literally getting out of your head and into your body? Samin Nosrat (she's a chef, by the way) says doing something physical can be super grounding. It could be as simple as taking a walk or hitting up a farmers' market. For her, jumping in the ocean is like hitting a reset button. Pretty cool, right?
Now, here's a wild thought from Naval Ravikant - he suggests remembering we're all gonna die someday. I know, sounds a bit morbid, but hear me out. It's about putting our daily struggles into perspective. Suddenly, that thing you're stressing about doesn't seem so huge anymore.
Oh, and get this - Bozoma Saint John swears by power naps. Just a quick snooze can help clear your head. I don't know about you, but I'm all for any advice that involves napping!
There's also this neat trick from Graham Duncan. When you're stressed about something, ask yourself, "What's the worst that could happen?" It's a way to challenge your fears and look at things more rationally.
Now, if you're feeling overwhelmed, Soman Chainani has a hot take - you probably need either exercise or to rethink your commitments. And if you're feeling unfocused, it might be because you're afraid of failing. The trick is to push through that fear.
Jesse Williams (yeah, the actor) has a great question to ask yourself: "What would you do if you weren't afraid?" Pretty powerful, huh?
Some folks find writing helpful. Richa Chadha suggests journaling to get clarity. And if you're not into writing, how about meditation? A bunch of people mentioned it, including Patton Oswalt who says it's the best thing he's ever learned.
There's so much more great advice here - from reading poems to taking walks in nature, from cold showers to making lists. The key is finding what works for you.
I will post all the original advice in the appendix. It would be too much to fit in here. So whenever you feel like experimenting something new you can just do a checklist and try each strategy.
Part III: Investing
Having explored both the theory and practical techniques for emotional management, it's time to apply these insights to a critical area where emotions can significantly impact outcomes: investing. In this section, we'll see how emotional stability plays a pivotal role in successful investing, and I'll share specific strategies to help you navigate the emotional challenges of the financial markets.
You know how Warren Buffett says emotional stability is super important for investing success? Well, he's onto something there. Let's break down some key ideas about emotions and investing.
First up, we've got this cool concept from Ian Cassel called the "Pendulum of Emotions." Imagine your emotions swinging back and forth like a pendulum - from super optimistic to totally pessimistic. It's like when the market's good, we're all sunshine and rainbows, ignoring any red flags. But when things go south, suddenly every little thing seems like a disaster. Sounds familiar, right?
Here's the thing - we're all human, and our brains love to play tricks on us. We tend to see what we want to see in the market, which can lead to some pretty wonky decisions. It's like wearing rose-colored glasses one day and doom-and-gloom goggles the next.
So, what can we do about it? Well, first off, just knowing this happens is a big step. Once you realize the market is often more about feelings than facts, you can start to see things more clearly.
The real trick is finding that sweet spot between being too optimistic and too fearful. It's like being the calm in the storm - when everyone else is freaking out, you're the one keeping your cool.
Here's a fun idea - try being a bit of a contrarian. When everyone's super excited about a stock, maybe that's the time to be a little cautious. And when everyone's running for the hills? That might just be your chance to find a great deal.
Now, let's talk about the "14 Stages of Investing Psychology." It's like a rollercoaster ride for your emotions!
1. Optimism: You're feeling good, buying stocks based on hunches.
2. Excitement: Things are going well, and you're pumped!
3. Thrill: You're on top of the world, feeling like a genius investor.
4. Euphoria: This is the peak - maximum gains, but also maximum risk.
5. Anxiety: Uh-oh, things are starting to turn...
6. Denial: "It's just a temporary dip, right?"
7. Fear: Reality hits, and you realize you might not be as smart as you thought.
8. Desperation: Trying anything to recover those losses.
9. Panic: Total loss of control - not a fun place to be.
10. Capitulation: You give up and sell everything.
11. Despondency: Swearing off investing forever.
12. Depression: Lots of regret, but also a chance to learn.
13. Hope: Cautiously looking at new opportunities.
14. Relief: The market's turning around, and you're back in the game.
The key is to recognize where you are in this cycle. Are you at the "I'm a genius" stage? Maybe time to be a bit more careful. Feeling totally hopeless? That might actually be the best time to find great deals.
Remember, successful investing isn't just about numbers - it's about managing your emotions too. It's okay to feel these things, but the trick is not to let them control your decisions.
What do you think about all this? Have you ever caught yourself on this emotional rollercoaster? Any strategies you use to keep your cool when the market's going crazy? I'd love to hear your thoughts!
Now let’s get into more specific emotions and cases we are faced with when investing.
Fear of Missing Out (FOMO):
Alright, let's dive into this FOMO stuff - it's a big deal in investing, and I bet you've felt it before. I know I have!
So, FOMO - Fear of Missing Out. It's like when you see everyone jumping on a hot new stock, and you think, "Oh no, I'm gonna miss the boat!" It's that nagging feeling that you're going to be left behind while everyone else is making bank.
Here's the thing about FOMO - it can make us do some pretty silly things. Like buying a stock just because it's going up, without really knowing why. It's like jumping on a moving train without knowing where it's headed. Sounds scary, right?
Let me tell you a little story. Back in 2021, a lot of folks were making quick profits left and right. It seemed like you could throw a dart at the stock market and hit a winner. But then 2022 rolled around, and boom! Things changed. All those FOMO-driven investments? Yeah, they didn't look so hot anymore.
So, how do we deal with this FOMO monster? Well, this smart investor named Mavix came up with a cool trick. They call it the "Quick List." It's like a shopping list, but for potential investments. Here's how it works:
1. You jot down the names of companies that catch your eye.
2. But - and this is key - you don't do any deep research right away.
3. You let some time pass. Maybe a few days, maybe a week.
4. Then, if you're still interested, you do your homework.
It's like letting your food cool down before you eat it. You're less likely to burn your tongue, or in this case, your wallet!
Mavix is all about playing the long game. Be cool with missing out on a quick 10-20% gain if it means making a smarter decision in the long run. It's like choosing a steady jog over a sprint - you might not win the 100-meter dash, but you'll finish the marathon.
Now, here's the cool part - you can tweak this strategy to fit your own style. Maybe your "Quick-List" is a notebook or an app on your phone. The important thing is finding a way to slow down those FOMO impulses.
And remember, nobody's perfect at this. Even Mavix says he’s always learning and adjusting his approach. It's like a never-ending game of financial Tetris - you've got to keep adapting as new pieces fall.
So, what do you think? Have you ever felt that FOMO itch when investing? How do you deal with it? Maybe you've got your own "Quick-List" strategy? I'd love to hear about it!
Overconfidence:
Alright, let's chat about overconfidence. You know that feeling when you think you've got it all figured out? Yeah, that can be a real trap in investing.
So, overconfidence is like thinking you're the next Warren Buffett after a few good picks. It's when you start believing you can predict the market like a fortune teller. Spoiler alert: you can't, and neither can anyone else!
Here's the tricky part - overconfidence usually sneaks up on you when things are going well. It's like, "Hey, I'm on a hot streak! I must be a genius!" And before you know it, you're trading like there's no tomorrow and taking risks that would make a Vegas gambler nervous.
Now, you'd think it'd be hard to feel overconfident when your portfolio's taking a nosedive, right? And you're spot on. It's when you're riding high that you've got to watch out. Maybe you've been outperforming the market for a while, or you've had a few big wins in a row. That's when overconfidence can start whispering in your ear.
So, how do we keep our egos in check? Well, it's simple... but not easy. (Isn't that always the case?)
First up, stick to your guns. If you've got a strategy that's worked for you over time, don't abandon it just because you're feeling lucky. It's like having a good recipe - you don't suddenly start throwing random ingredients in just because the last few batches turned out great.
A good checklist can be a lifesaver here. It's like a reality check for your investments. Before you make a move, run through your checklist. It helps keep you grounded and consistent.
And here's a humbling exercise - keep a record of your mistakes. I know, it sounds about as fun as a root canal, but hear me out. By constantly reminding yourself of the times you got it wrong, you're less likely to get a big head when things are going right.
It's all about keeping that humility in check. Remember, even the best investors in the world make mistakes. The key is learning from them and not letting success go to your head.
What do you think? Have you ever caught yourself feeling a bit too confident after a good run? How do you keep yourself grounded? Do you have any tricks up your sleeve for battling overconfidence?
Fear
Let’s talk about fear in investing—it’s something we all face, and it can really throw off your strategy if you’re not careful. Ian Cassel has some insightful thoughts on this.
Fear can be like a fog that clouds your judgment, pulling your focus away from long-term goals and making you obsess over every little thing that could go wrong. This kind of short-term thinking can undermine the principles that make long-term investing work.
When fear kicks in, it triggers a fight-or-flight response. Instead of thinking about future growth, you might start making decisions based on immediate survival, like selling off investments too quickly just to avoid potential losses. It’s like reacting to a bump in the road as if it’s a cliff.
Fear also creates tunnel vision, where you only see the dangers right in front of you and miss out on future opportunities. This can lead to pessimism, where you stop focusing on picking good stocks and start trying to time the market—something that’s rarely successful.
Another effect of fear is increased trading. It’s tempting to trade more to feel in control, but this often leads to chasing the next big thing instead of sticking to a solid strategy. While it might relieve anxiety in the short term, it’s usually not great for your portfolio.
As we gain more experience, you might collect some “battle scars” from past losses, which can make you overly cautious. While caution is necessary, too much of it can prevent you from taking the risks needed for real growth.
Cassel emphasizes the importance of confidence in investing. It’s like being a basketball player—you need to keep taking shots, even if you miss some. Confidence helps you stay in the game and not let fear dictate your moves.
In the end, there’s truth to the saying, “Scared money doesn’t make money.” While it’s important to be cautious, letting fear control your decisions can keep you from making the gains you’re after. Successful investing requires taking calculated risks and playing offense, not just defense.
So, in short, fear can derail your investing by driving short-term thinking and excessive caution. The key is to stay confident, keep the long-term view, and not let fear take the wheel.
Expectations
Let’s dive into some key ideas about maintaining a realistic perspective in investing. It’s easy to get caught up in optimism, but Ian Cassel has some important reminders for us.
First, it’s crucial to have a long-term perspective. When we buy stocks, we often expect businesses to perform steadily or even improve over time. But the reality is, businesses face setbacks more often than we’d like to admit. Instead of being constantly surprised when things don’t go as planned, we need to be prepared for these bumps in the road.
Stock pickers tend to have a bullish bias—we’re naturally optimistic and often look for evidence that supports our investments. While optimism can be a good thing, it can also set us up for disappointment when businesses face inevitable challenges.
It’s easy to blame management when a company underperforms, but sometimes, the problem lies with our own expectations. If we’re too optimistic, we might set ourselves up for frustration. It’s a good reminder to manage our own expectations instead of pointing fingers.
Understanding business growth is key, especially with smaller companies. Growth isn’t a straight line; it’s more like a series of hurdles. Hiring, training, and unexpected issues can cause temporary setbacks, and as investors, we need to account for these challenges.
Cassel also argues against relying on short-term guidance from companies. He believes it forces management to meet targets they can’t fully control, which isn’t healthy for long-term growth. Without this guidance, we as investors need to form our own opinions and take responsibility for our expectations.
When it comes to timeframes, patience is essential. Most successful investments take longer to pay off than we initially think. Cassel suggests adopting a three-year perspective, giving businesses the time they need to meet and even exceed long-term expectations instead of focusing too much on short-term results.
Finally, managing expectations is key. Cassel has a great analogy: hold your short-term expectations like a tube of toothpaste—not too tight. Give companies some room to disappoint you in the short term, and a lot of room to exceed your expectations in the long term. You can’t control the short-term outcomes, but you can control how you react to them.
Loss Aversion:
Let’s talk about loss aversion—it’s that instinct we all have to avoid losses rather than chase equivalent gains. It’s what makes us hold onto losing investments for too long, hoping they’ll bounce back, instead of cutting our losses and moving on to better opportunities.
Warren Buffett put it best in his 1994 shareholder letter when he said, "You don't need to make your money back the way you lost it." And that’s a crucial lesson. Once you realize you’ve made a mistake, the best move is to learn from it and move on quickly. It’s like gardening—you wouldn’t keep watering the weeds while neglecting the flowers. The same logic applies to investing.
Often, we’d be better off averaging up on our winners rather than trying to salvage our losers. But there’s this common belief that we should buy more when something gets cheaper and trim our positions when they grow too large. While there are times when something genuinely does become a better deal, blindly following this rule can be risky.
The key is to stay rational and not let fear or stubbornness dictate your decisions. Sometimes, it’s better to let go and focus on where your money can grow, rather than trying to fix what’s already broken.
Anchoring:
Anchoring is when we fixate on a specific price or benchmark, like holding onto a stock just because we remember its past high price, even if the current market conditions or future prospects don’t justify it.
This one’s tough to shake, especially since it feels like every time I research a stock, it suddenly jumps 10%—though I’m exaggerating, it has happened a few times! The key to overcoming this is to have a filter in place: if there’s not enough upside to justify paying a bit more than your initial anchor price, then maybe the opportunity isn’t as great as you thought.
For example, if something is priced at $10 but you believe it’s worth $30, it wouldn’t make much sense to pass on it just because it’s now $12. Sometimes, just doing the math helps you see the right move clearly. But be careful—don’t use this logic to justify buying at any price. It’s easy to convince yourself that something growing at 20% over the last three years will keep doing so for the next ten, but that’s not always the case.
Confirmation Bias:
Confirmation bias is when we tend to seek out information that confirms what we already believe, ignoring anything that contradicts our views. In investing, this can lead to making decisions based on incomplete or skewed data.
It’s natural—when we’re convinced about an investment, it feels better to avoid cognitive dissonance by focusing on information that supports our belief. But here’s my take: you’ve got to put your thoughts out there, whether it’s to friends, on X, YouTube, or in private communities. Getting feedback on your ideas is crucial.
Also, after you’ve convinced yourself that investment XYZ might double in five years, try flipping the script—think about what could go wrong. If we make this kind of reverse thinking a regular part of our checklist and investment process, we stand a better chance of overcoming this bias.
Herd Behavior:
Herd behavior is when investors follow the crowd, buying or selling just because everyone else is doing it, instead of relying on their own analysis. This can lead to amplified market bubbles and crashes.
Ian Cassel, who focuses on under-the-radar microcaps, has a key rule: he prefers ideas that few others have discovered. This approach makes you more accountable because if things go south, you’ve only got yourself to blame. Plus, borrowing conviction from others is risky—if you’re just following the crowd, your results are likely to be average at best.
Now, sourcing every single idea on your own can be time-consuming and tough, so it’s not about ignoring ideas from others entirely. The important thing is to practice independent thinking. If your portfolio looks just like everyone else’s on Twitter or other platforms, you’re probably not going to outperform the average. Instead, focus on doing your own high-quality research and forming your own opinions. That way, your conviction is truly earned.
Now here are some other ideas that don’t necessarily fit in a specific bucket but are very useful.
Be Self-Aware
The key to avoiding emotional decisions in investing isn’t about eliminating emotions altogether; it’s about avoiding decisions when we’re overwhelmed by them.
Before making any big decision, try using the HALT PS mnemonic: hungry, angry, lonely, tired, in pain, or stressed. These states can make us poor decision-makers, so it’s wise to incorporate this check into your process. If you’re feeling any of these, consider sleeping on it or addressing the issue first. Delaying decisions until you’re in a better state can lead to much smarter choices.
Another useful approach is to write down your emotional triggers. For example, if you notice that stress makes your throat tight or your eyes sore, jot that down. If you feel these symptoms while researching or deciding, it’s a sign to delay your decision. It’s amazing how simply listening to our bodies can help us avoid forcing decisions when the timing isn’t right. Typically, stress and related emotions manifest in the upper body—neck, back, or head.
I highly recommend using Journalytic to make sure you keep track of emotional cues, etc … (not sponsored)
This leads me to another important insight I’ve found...
Delay Decisions
The space between impulse and action is where we have the chance to engage our deeper, more rational thinking—what’s often called "system 2" thinking. By widening that gap over time, we can practice delayed decision-making, which is especially useful for tough decisions.
Hyperactivity can seriously hurt returns. When we feel the urge to act quickly, especially in investing, we’re more likely to make emotional mistakes. For long-term investors, most opportunities don’t need to be acted upon immediately. Waiting a bit longer—whether it’s a few days, weeks, or even a month—can be a smart way to avoid hasty, regrettable choices, even if prices move upward in the meantime.
If you feel like you’re rushing through research to grab a seemingly great opportunity, it’s probably wiser to wait. Sure, you might miss out on some gains, but more often than not, you’ll avoid making costly mistakes.
That said, it’s important to remember that sometimes quick decisions are necessary. In other areas of life, procrastination isn’t a good idea, so let’s not use delayed decision-making as an excuse to avoid action when it’s truly needed.
Don’t beat yourself up
Investing is a long-term, forgiving game. You don’t have to be right all the time to build significant wealth. This reminds me of Roger Federer’s commencement address at Dartmouth, where he mentioned that he won nearly 80% of his matches — not too crazy for one of the greatest tennis players of all time. But here’s the interesting part: he only won 54% of the points in those matches. This highlights the power of consistency and persistence. Even world-class athletes, and professionals in any field, make almost as many mistakes as they do great plays.
In investing, we should embrace this fact. It’s about making small, incremental improvements without beating ourselves up over every misstep. You don’t need to make brilliant decisions all the time—most of the time, good enough is more than enough, especially if you can do it consistently over the long haul.
Building wealth isn’t about pushing yourself to the limit every day like a high-performing athlete. It’s about sustainable progress. Good enough decisions, made consistently, can lead to an extraordinary track record. Remember, investing is a forgiving game, as long as you stay in it and don’t get knocked out by trying to be perfect.
Conclusion
We've covered a lot of ground, from understanding the theory of emotions to applying practical techniques in investing. As we reach the conclusion of this guide, let's take a moment to reflect on the key takeaways and how you can continue to develop your emotional resilience in both life and investing.
Final Thoughts
In general, keeping life simple and predictable can help you stay grounded. It doesn’t mean you shouldn’t have fun or break the routine occasionally, but when life starts to feel hectic, stick to the basics. Say no to unnecessary distractions. Embrace an "I don't know" mindset—it helps you avoid overconfidence, challenge preconceived ideas, and dive deeper into your research. Starting with a beginner’s mind can maximize learning, and seeking out disconfirming evidence is crucial. Reward yourself when you dismantle a cherished belief. Remember, emotions are real but not always true, and part of being strong is acknowledging and discussing them openly.
Don’t check Stock Prices let Prices Check You
It’s also important to have a process you stick to, improving it only when something better comes along. Don’t obsessively check stock prices—let them come to you. Set up alerts for significant movements, like a 5% drop in a day or a 10% decline from a certain level, and check prices only when those triggers hit. Most of the time, everything else is just noise. This doesn’t mean you shouldn’t do maintenance on your investments; just don’t let price-checking dominate your routine.
Finally, writing down your strategy for handling emotions, like I just did, is one of the best ways to improve. When emotions start to take over, go back to first principles and reread the classics as well as your own notes. This can help you better cope with and embrace your emotions.
A lot has been covered here, but remember the 80/20 rule: you don’t need to apply everything.
As Charlie Munger wisely said, “Take a simple idea and take it seriously.”
Thanks for reading, and I’d appreciate any feedback you have.
Appendix (everything here was shamelessly copied from the Tribe of Mentors, hope no one gets mad I’m open to removing it and if you like this buy the book)
For those who are interested in exploring further, the Appendix contains additional resources and insights from various experts. These are included to provide you with a broader perspective and more tools to help you on your journey to emotional mastery.
SAMIN NOSRAT
When you feel overwhelmed or unfocused, what do you do?
I try to get out of my head and into my body. On writing days, this usually involves getting up and going for a walk around Downtown Oakland. Sometimes, I completely throw in the towel and go for a swim. Other times, I decide to visit the farmers’ market to look at, touch, smell, and taste the produce, letting my senses guide me in deciding what to cook for dinner.
When I’m cooking or doing other physical work and feel overwhelmed, it’s usually because I’m not taking care of myself. So, I’ll take a break. I might make a snack, brew a cup of tea, or just drink a glass of water and sit outside for a few minutes. This is usually enough to get me calm and clear.
But the one thing that always gets me unstuck is jumping into the ocean. It’s been that way ever since I was a kid. I’ve always loved the ocean, and now, whenever I can, I’ll go to the beach to swim, surf, or just float. Nothing else resets me like the ocean.
STEVEN PRESSFIELD
I have a friend at the gym who knew Jack LaLanne (Google him if the name is unfamiliar). Jack used to say it’s okay to take a day off from working out. But on that day, you’re not allowed to eat. That’s the short way of saying you’re not really allowed to get unfocused. Take a vacation. Gather yourself. But remember, the only reason you’re here on this planet is to follow your star and do what the Muse tells you. It’s amazing how a good day’s work will get you right back to feeling like yourself.
DEBBIE MILLMAN
As a loudmouthed native New Yorker, I have often regretted acting impulsively when I am feeling angry or frustrated. Now, when I feel that familiar urge to respond defensively, say things I don’t really mean, or bang out a wounded response via email or text, I wait. I force myself to breathe, take a step back, and wait to respond. Just an hour or two or an overnight retreat makes a world of difference. And if all else fails, I try to obey this message I got in a Chinese fortune cookie (which I have since taped to my laptop): “Avoid compulsively making things worse.”
NAVAL RAVIKANT
Memento mori—“remember that you have to die.” All of this will go to nothing. Remember before you were born? Just like that.
BOZOMA SAINT JOHN
I sleep. Or rather, I nap. There’s no conundrum that a 20-minute nap can’t help me unpack. It’s like a refresh button for my mind. I wake up clearer and more able to make the “gut” decision because I’ve stopped thinking. Whatever I’m feeling when I wake up is the feeling I go forward with.
GRAHAM DUNCAN
I ask myself, “What would be the worst thing about that outcome not going the way I want?” I had started using it out loud with my kids, and recently my eight-year-old daughter started asking it back to me. I really like to be punctual. We were late to drop her at school, and I was impatient, so she asked me, “Dad, what exactly would be the worst thing about being late?” It completely shifted my mindset in the moment. I like the question because it often surfaces a hidden assumption.
MIKE MAPLES JR.
I step back, slow down, and ask the five whys. And when I am done, I also ask if I am afraid of something but too afraid to admit it. We are drawn to the simplicity of jumping to conclusions. We are all ignorant in some way all of the time. So, I have come to learn that what we need are methods to counteract our ignorance.
The five whys is a good way of slowing down and improving decision quality. The most important thing is that it lets me get into a mental space about “what” is going right or wrong rather than “who” is right or wrong.
Let’s take an example: Say we miss the sales target for a quarter. It can often become tempting to figure out “whose” fault it was: Did Sales fail to execute? Do we have a marketing problem? Is the product not differentiated enough? If you are not very, very careful, you can contribute to an environment where people will point fingers at each other and lose their ability to truly learn from the problem.
So instead, I find it helpful to slow down. If I am by myself, I write the five whys on paper. If I am in a group, I write the questions down one at a time on a whiteboard:
Q: Why did we miss our $1M sales target this quarter?
A: We made fewer sales calls than planned.
Q: Why did we make fewer sales calls than planned?
A: We had fewer leads to work this month.
Q: Why did we have fewer leads this month?
A: We sent fewer email outreaches than planned.
Q: Why did we send fewer outreach emails than planned?
A: We were short-staffed.
Q: Why were we short-staffed?
A: We didn’t plan around the fact that two people were on vacation.
In this example, it would be very tempting to answer at the surface level and try to figure out if it’s a “sales problem” or a “marketing problem” or a “product problem.” But before that happens, I find it is better to focus on honoring the discovery of the truth rather than determining who is to blame.
Going very slow in this exercise is helpful because it can cause people to turn off their “lizard brains” and fight-or-flight instincts and shift their thinking to their rational brains and problem-solving.
In general, whenever I feel things are moving too quickly, I find the right instinct is almost always to slow down and get my thoughts back in order. It ends up speeding things up because we get better decisions and more alignment of everyone on the team. If someone on the team needs to be replaced because they don’t have the right skill set, we should face that problem too, but only after we have done our best to seek the truth of the situation. Ego is about who’s right. Truth is about what’s right.
SOMAN CHAINANI
Feeling overwhelmed usually means one of two things: either my blood’s trapped in my head and I need to exercise, or, more likely, I’ve overcommitted myself and my brain knows there’s no way I can reasonably get everything done that I’ve set out to do. The solution is usually to take a deep breath, look at the calendar, and start canceling things or moving deadlines until the paralysis evaporates.
Feeling unfocused, on the other hand, usually means I haven’t quite locked into whatever I’m working on yet—that a part of me still thinks I can pull the ripcord and bail. This often happens in the first three months of writing a new book. In the end, a lack of focus is usually just fear: fear that the project I’m attempting will go nowhere or fail miserably. Early on, I used to give in to that fear. Four books later, I know it’s just a ghost, and I can blow right through it without looking back.
JESSE WILLIAMS
I tend to lose focus for one of two reasons: exhaustion or distraction. Or both. Sometimes I look to the cold for a remedy: a walk in the crisp air, a cold drink, or a shower. The shower doesn’t have to be cold; the ceremony itself is a kind of reset button. If it’s exhaustion, I’ll just take a nap or, more recently, meditate. If the problem isn’t exhaustion, I might pick up whatever novel I’m reading and go off on that journey. Reading creative writing stimulates my creative thoughts. I get big ideas, I’m reminded of something I meant to act on—an incomplete task or a story idea of my own.
My friend Adepero likes to ask, “What would you do if you weren’t afraid?” That’s a good one.
RICHA CHADHA
I have a few approaches. First, I journal. It gives me clarity. I’ve had a diary ever since I was about ten. Today, when I look back at my scribbles from when I was in high school, it gives me great joy to notice how far I have come intellectually and career-wise. I am living my dream. I used to journal frequently as a student growing up. My diary looked like a scrapbook, with illustrations and quotes that inspired me. I journal at least three times a week now, and the time dedicated to it is proportional to my state of mind. If I am contemplative or confused, it tends to be a long session. I maintain one diary that has everything: my to-do list (which I divide into personal and professional), contemplations, how I felt about an incident that perhaps triggered me to journal, and sometimes just plain gratitude. I always buy interesting journals and colorful pens. Right now, I am using a Wonder Woman journal and neon pens. People may think it’s childish, but the different colors help me retain more and keep it fun.
I meditate. This is a challenge when I feel like my head is in turmoil. I generally start by focusing on my breath. I could count back from ten to one while exhaling, and I drift into meditation. It takes about 20-odd minutes to become somewhat thoughtless. Sometimes I feel like I am asleep, but I realize that lucidity is meditation. It always helps. There has not been a single time in my life when I have meditated on something and it hasn’t been useful. I meditate either first thing in the morning or post-lunch if I am at a stressful film shoot.
I talk to my father. He is my friend and mentor, and being a life coach and behavioral psychologist, he keeps me grounded and on track.
I take a break. I de-tick my cat, take long baths, go on a trek, spend time in nature, read, eat yummy food, and do a life/career detox. This time off usually gifts me with several epiphanies, and it always works. A life detox is me delegating my responsibilities to an assistant or manager for a while and seeking help before I turn my phone off and wander, think, and relax. A career detox means I turn my phone off, don’t read about how films/shows/plays are faring, and just be a regular person.
I also do a “so what” exercise. I make a statement and ask myself “so what?” at the end of it. For instance:
X was rude.
So what?
I felt disrespected.
So what?
I don’t like being disrespected.
So what?
What if everyone stops respecting me?
So what?
I will be alone and loathed.
So what?
I don’t want to be alone.
So what?
I have an irrational fear of loneliness.
So what?
It’s irrational.
So nothing. I’m good.
So what? So nothing.
NEIL STRAUSS
Overwhelmed and unfocused seem like two different problems. I’m thinking that overwhelm is about mentally managing what’s coming from outside yourself, while being unfocused is about mentally managing what’s going on inside.
Overall, what works for both is to think of my mind as a computer, and the RAM is full. So it’s best to shut it off for a little while. For me, this means stepping away from work for anything from a cold shower to a surf to meditation to a breathing exercise outside to talking with someone I immensely enjoy. Anything healthy that gets you out of your mind and into your body is ultimately good for your mind.
VERONICA BELMONT
I always feel better after making a good list. It’s a lot more satisfying for me to have something written down on paper that I can forcibly cross off when it’s done. It gives me better focus on what I can get done in the short term, and actually feels like a completed task in and of itself.
If I’m feeling overwhelmed, nothing is better than taking my dog out to the park. Walking, fresh air, and seeing happy dogs always reset me in a really positive way. Also, it’s nice knowing that your dog will always love you no matter how stressed out you are!
PATTON OSWALT
I meditate. I sit for 20 minutes and meditate. Best thing I ever learned how to do.
JERZY GREGOREK
Over the last half of my life, I’ve read hundreds of poetry books. Whenever I read a poem that I loved or felt a deep connection to, I added it to a collection I titled “200 Antidepressant Poems.” Now, whenever I feel overwhelmed or feel I did something wrong, I go to the meditation room, randomly open my manuscript, and read a poem loudly. Usually, two poems are enough to make me feel better and restore love in my heart.
Here are my 11 favorite poems to read when I am feeling depressed (11 is the master power number):
“The Fish” by Elizabeth Bishop
“Leaving One” by Ralph Angel
“A Cat in an Empty Apartment” by Wisława Szymborska
“Apples” by Deborah Digges
“Michiko Nogami (1946–1982)” by Jack Gilbert
“Eating Alone” by Li-Young Lee
“The Potter” by Peter Levitt
“Black Dog, Red Dog” by Stephen Dobyns
“The Word” by Mark Cox
“Death” by Maurycy Szymel
“This” by Czeslaw Milosz
ANIELA GREGOREK
The most helpful practice for me when I feel unfocused is to go for a walk in nature. Being near the water has a calming effect on my nervous system, and the rhythm of the waves pacifies me. Similarly, walking among the trees has the same effect. In Japanese, there is a term, “forest bathing,” where you take a walk under the trees, and the coolness, the smell, and the silence wash over you. I feel relaxed, cleansed, and clear-minded afterward.
In nature, I experience the opposite of sitting meditation. Sometimes trying to tame the mind and get focused in my Transcendental Meditation, which I have practiced for many years, just magnifies whatever is happening inside me. That makes me feel more tired and stressed out—this is when I turn to nature. I feel nature meditates me.
AMELIA BOONE
This may sound odd, but I’ll tackle a chore like scrubbing the bathtub or cleaning out the fridge. When I feel stuck, sometimes accomplishing a task, however mundane, gives me the momentum I need to refocus. Either that, or I’ll work up a sweat, preferably in the form of a trail run. Nature and endorphins are always the answer.
ANNA HOLMES
Two things: I try to breathe deeply and I walk, preferably in some sort of natural setting: a park, along the NYC waterfront... if I’m lucky, someplace outside of the city, like paths and trails in Maine, the UK, or my beloved home state of California. I also like road trips. I find that long drives help me to put things in perspective, solve problems, and blow off steam. (I sing in the car. Loudly.) Moving throughout the world, whether by foot or four-wheeled vehicle, gives me a different way of looking at things and inspires me to feel gratitude for even the smallest pleasures: a fluffy cloud, a chipmunk scurrying across the road, a hawk sitting on a fencepost, a gaggle of teenagers making a ruckus and having the time of their lives.
ANDREW ROSS SORKIN
Whenever I’m feeling like I need to prioritize what I’m doing or overthinking a particular situation that is making me anxious, I try to remember this great exchange in the film Bridge of Spies. Tom Hanks, who plays a lawyer, asks his client, who is being accused of being a spy, “Aren’t you worried?” His answer: “Would it help?” I always think, “Would it help?” That is the pivotal question that I ask myself every day. If you put everything through that prism, it is a remarkably effective way to cut through the clutter.
JOSEPH GORDON-LEVITT
I like to write. I’ve gone through different phases in my life of writing in a journal more or less frequently, but it’s something I turn to, especially when I’m trying to work through something that’s vexing me. I sit down and describe my situation in writing. I type. I use complete sentences. I guess I write it as if it’s for an audience, even though I never show it to anyone. By having to explain it to a “reader” with no prior knowledge, I’m forced to identify and parse all the elements and nuances of what’s really going on. Sometimes I arrive at new answers or conclusions, but even when I don’t, I’m usually thinking more clearly and breathing a bit more easily.
VITALIK BUTERIN
It depends on what kind of overwhelming situation it is. In general, it’s always helpful to switch one’s focus to something else at least for some time, perhaps by going on a walk. If it is because of a technical problem (i.e., how do we get task X done?), then the best way to get around an impasse is to put yourself in many different situations and environments to try to get some new inspiration.
The more difficult kind to deal with is social situations. In this case, it’s important to avoid falling into the trap of seeing things from the perspective of the last person you talked to, or even in general the people you spend more time with; you need to try to find ways to neutrally evaluate the situation, and perhaps talk to others who are outside of the circle that’s currently in conflict.
ESTHER PEREL
I seek out people to help me regain my focus, my confidence, and my clarity. I live my life in a network of friends, family, colleagues, strangers, mentors, and students. When I get overwhelmed, I lose a sense of direction, and I need a human GPS to help me “recalculate” and find my path.
In moments when you don’t believe in yourself, you need other people who believe in you. They can hold you up when you falter and keep you from hitting the ground. Other people see you differently from the way you see yourself. And that multiplicity of perspectives is essential to making us who we are. Identity is always a two-way street—created from the inside out and the outside in.
Many people feel that when they are overwhelmed or lose focus, they need to retreat into themselves and shut out the world. They think that there is greater merit and virtue in figuring things out alone. That doesn’t work for me. I find myself, and activate my greatest creative capacities, in relationship with the beautiful diversity of other human beings.
MARIA SHARAPOVA
My best friend put a little quote in my birthday card a few years ago: “What makes a river so restful to people is that it doesn’t have any doubt—it is sure to get where it is going, and it doesn’t want to go anywhere else.”—Hal Boyle.
There is so much going on in a day, actions and distractions, it’s easy to get caught up and lose your vision. This quote brings me right back to where I want to be. It keeps me grounded.
ADAM ROBINSON
When I am feeling unfocused, the first question I ask myself is, “Am I rehearsing my best self?” And if the answer is no, I ask myself how I can reset. Each day presents us with 86,400 seconds, which means each day presents us with virtually countless opportunities to reset, recover our balance, and continue rehearsing our best selves.
If I realize my focus is off, and certainly when I’m experiencing any negative emotions, I ask myself, “Where should my attention be right now?” Almost always, the answer is “my mission,” which is like a beacon that always beckons.
But sometimes I take on too many commitments. Because I sometimes have trouble saying no to others eager to work with me, I can become overcommitted and overwhelmed.
When that happens, rather than attempting to do everything badly, I ask myself, “What activity or commitment can I cut out right now that will free up the most time?” It reminds me of a news story I read ages ago about a small European town (I won’t say what country, lest I offend it unnecessarily) in which the postal workers had trouble keeping up with their deliveries.
On Monday they’d do their best to deliver the mail, but they’d have some pieces left over, which they’d add to Tuesday’s delivery pile. Tuesday they’d fall further behind, of course, and Wednesday and Thursday further still. By Friday, they’d have an enormous pile of undelivered mail, which they’d burn so they could start “fresh” on Monday. The process would repeat the next week, a small bonfire every Friday purging their delivery vans of that week’s undelivered mail.
Now, that was a highly dubious way of “resetting” each week, which I don’t recommend! But the idea of having a fresh restart whenever overwhelmed is excellent. So, let’s say by noon on any given day I’m running behind, and it’s clear I’m in danger of becoming overwhelmed in short order. Rather than attempting to keep all of my afternoon appointments, which I’d reach later and later as the day progressed, I scan my calendar, asking myself which is the earliest appointment I can “burn” by postponing it to another day. I’d rather reschedule one appointment and make the other three on time than be late and frazzled for all four appointments that afternoon.
Speaking of which, each week I leave one day completely open and schedule a pretend trip out of the city so that I’m not tempted to fill it in any way, not even with meeting friends or other fun diversions. Then, if an emergency arises or I fall behind and become overwhelmed, I know I have a “free day” to use any way I’d like.
So, when I get overwhelmed trying to juggle too many balls simultaneously, I ask myself which one or two I can set down—for the moment—so I get caught up on all the others.
JOSH WAITZKIN
I change my physiology. If I am near waves, I go surf them. If not, I do a short, intense kettlebell workout, go for a bike ride, swim, take a cold shower or ice plunge, or practice Wim Hof or heart rate variability breathing. It’s remarkable how the mind follows the body. Honestly, I think a lack of understanding or desire to understand that simple evolutionary reality is what inhibits so many people from rapidly improving their lives.
JASON FRIED
I go for a walk, preferably on a route I’ve never taken before. If it’s a routine route, I tend to ignore the surroundings and slip back into thinking about the stuff I’m unfocused on. But if it’s a new route, I focus outward, and my mind clears up quickly. It seems like it has to be about 30 minutes or more to really do the job, but nothing refreshes me like walking in a new direction, toward something or somewhere I haven’t headed before.
ARIANNA HUFFINGTON
I love taking even five minutes for a short meditation. It helps me move beyond the surface and go deeper, and after just a few moments of focusing on my breath, I feel recentered.
TOM PETERS
Walk. Walk. Walk. A 30-minute (or even 15-minute) out-of-the-office walk with no devices almost invariably clears my head. My book In Search of Excellence got its de facto theme during a single 1977 meeting with Hewlett-Packard president John Young. He said the HP mantra was “MBWA.” Translation: Managing By Wandering Around. It stands for being in touch, being human—and learning from everyone. Years ago, I worked with a wildly successful Nordstrom store manager. She said (approximately), “When I’m stuck or down, I stand up from my desk and take a 30-minute ramble on the floor. Just talking with our gang for a few minutes clears my head and unfailingly inspires me.”
BRENÉ BROWN
Always these questions:
Sleep?
Exercise?
Healthy food?
Am I resentful because I’m not setting or holding a boundary?
LEO BABAUTA
I drop into my breath and the sensations I’m feeling in my body. When I feel overwhelmed, I ask myself, “What does this feeling feel like as a bodily sensation, right now?” Not a narrative about my feeling, but actual sensations in my body. I try to stay with those sensations for as long as possible and be curious about and open to them. This works with fear, distraction, procrastination, frustration, and more. Once I’ve meditated on this, I ask myself, “What’s the most loving thing I can do for myself and others right now?” Then I get to it.
MIKE D
Interesting question. My first tendency, especially when working on a song or music, is to keep going. Keep banging my head against the wall, hoping for a breakthrough, even if my poor head really f-ing hurts! But, I think with maturity (I am scared to admit to any maturity at all), I have learned that a reset is needed at times. This can take a few different forms. Here are some that have helped me:
TM: See above. Especially when I am overwhelmed, overtired, or just can’t figure something out and am becoming increasingly frustrated, spending 20 minutes doing TM can help me completely refocus and recharge. It often allows me to see things differently and be productive for hours, which equals a good return on investment.
Surfing: I am a lucky duck. I live in Malibu, California, with waves within walking distance. I spend a good amount of my time surfing with my kids all around the world, and it is worth every damn minute. I am well aware that most people are landlocked and are not afforded this luxury, but surf offers me a great reset. I instantly become so much more grateful and appreciative, and by being in nature’s playground, it offers perspective. The ocean and the wave are in control, not me. I am just a little speck trying to breathe and do the best I can.
Hanging with my kids: They won’t be kids forever, that is for damn sure! And sometimes I need a distraction from them! But I am always so grateful when we have amazing experiences and conversations together. It really does put things into perspective. One thing I am so grateful to be able to model: I was always included in my parents’ and their adult friends’ conversations, and I try to practice the same with my kids, valuing their ideas and thoughts.
Walking my dogs: By just taking a break and walking my dogs, I can usually figure a couple of things out.
ESTHER DYSON
When I’m overwhelmed, I ask, “What is the worst thing that could happen?” Fear of the unknown is generally far worse than fear of something specific. If it’s not the death of yourself or those you are responsible for, there’s probably some reasonable set of options you should consider calmly and thoughtfully.
ASHTON KUTCHER
Take a walk or run. Have sex. Or eat. Then I make lists. Generally, the cure for feeling overwhelmed is getting to a state of appreciation. Walking helps you appreciate the world around you. Running helps you appreciate oxygen, health, life. Sex... I mean, come on, it’s sex. Food is really just to make sure that you aren’t hangry. And making lists brings organization to the chaos and generally turns big things into little actionable things.
JÉRÔME JARRE
I simply try to ground, and to ground you need to touch something real. This can be by swimming—water is real; by meditating—your heart is real; by being in contact with an animal—animals are real; or by enjoying a delicious meal by yourself under the sun. I love being alone with food. By eating slowly and putting so many intentions into my food, I have started to develop a stronger sense of taste than I used to have. So when I eat, I tend to get very emotional with the taste of the food. These types of little, real moments get you out of your head.
FEDOR HOLZ
I work with my mindset coach, Elliot Roe, and/or use our app Primed Mind. After ten minutes, I’m in the zone, recharged, and ready to focus on my upcoming challenges.
ERIC RIPERT
To avoid feeling overwhelmed or unfocused, I spend about one hour meditating each morning. It’s taught me to make space for happiness and calm in my day. In stressful moments, I try to take distance from the situation and take time to reflect. I ask myself, “Am I able to make a difference right now?” If I don’t see a clear way to make a positive impact, I reflect further. Patience in problem-solving can often be underrated.
Elaboration from Cathy Sheary on Eric’s team: “Eric practices different types of meditation [usually every morning], including Samatha when he needs to focus, and Vipassana, which is a guided meditation and can be more religious, which he might use to contend with any anger. He can practice in most environments, but it’s usually in his meditation room. Sometimes it’s in his office, and sometimes when he’s walking.”
SHARON SALZBERG
I stop and ask myself, “What do you need right now in order to be happy? Do you need anything other than what is happening right now in order to be happy?” That orients me right away toward what I care about. I also try to remember to breathe. If I feel overwhelmed, I notice that I freeze, and my breath gets quite shallow. “Just breathe” is something I say to myself if I feel chaotic. Or I shift my attention to feel my feet against the ground. We tend to think of our consciousness as residing up in our heads, behind our eyes. I’ve learned to bring my energy down so I’m feeling my feet from my feet. Try it! It’s a little weird at first, but the more my awareness pervades my body, the more I remember to breathe, and the more focused I naturally become.
FRANKLIN LEONARD
I give myself a day off (or, if a full day isn’t possible, a few hours, or even a few minutes) with permission to not think about wherever I’m failing. That day usually includes some sort of strenuous activity and re-watching at least one of my favorite films (Amadeus and Being There are two favorites, both about how genius is found in unusual places).
I’ll take a pickup soccer game wherever I can get it. I instinctively hate the gym, but it’s both necessary and valuable as a way for me to keep fit and lose myself in physical pain as a distraction from the emotional pain that comes with being overwhelmed or unfocused. I’m also lucky enough to live blocks from Griffith Park in Los Angeles, so a long walk into the hills is easy.
OK, I believe this is enough to get you interested if you want to read the rest I recommend buying the book Tribe of Mentors.
Twitter
Enjoy simple things outside of investing for a few hours days if you can afford it. A coffee with friends or a walk in nature is often enough.
@RMW_Allocator
Long walks, or physical exercise.
Have a break, meaning doing something unrelated to investing for some time. That could be a walk by the sea, coffee, or a call with a friend you haven’t talked to for a while.
Listen to a podcast on a totally different topic. Andrew Huberman, lex friedman
@bogumil_nyc
I love walks in nature, a nice long quiet walk has helped me regain calm and clarity on many occasions. Then I ask myself — how will I remember this moment, challenge, and distraction ten years from now? It offers a better perspective. I hope this helps
For me, physical activity and getting outside in nature is my go-to, to calm the mind and for general well-being. It really works. I purposely live and work fairly close to nature so it’s not difficult. Sometimes it seems like there’s no time, but it’s as important as anything else. Making decisions while feeling overwhelmed, anxious, and cluttered, is a recipe for bad decision-making.
Also getting enough sleep, which is not always possible all the time. A work culture of super-long hours with not enough sleep decreases productivity and makes for bad decisions.
@SvnCapital
When unfocused, I just sit quietly and observe the thoughts - sometimes it's one thought on auto-replay, and other times it's a series of thoughts. But observing the thought(s) helps quieten the system down for me. Give it a try, and give it some time.
@FinSkeptic
Hi David, not sure how I earned my tag among those great investors but here is my opinion on the topic: I think more important than knowing how to regain clarity is knowing when you are unfocused. I would use @Journalytic to learn about
how your state of mind affects your decision-making. If you know you are in an unfavorable state, step back and do something noninvestment-related. I believe it is a superpower to know when to do simply nothing.
@investingdpark
Stillness
Nick Sleep & Charles Darwin echo Peter Keefe's observation
The volume of data consumption < the wisdom that comes from quiet reflection & experience
Uncommon Common Sense: Managing Emotions in Investing and Life