The Importance of Mental Strength

Physical strength, intellectual strength, and mental strength are the dimensions that investors can be measured. Yet, among these three dimensions, mental strength is probably both the hardest to acquire and the most important to have.

In investing, long hours do NOT guarantee good results. Investment analysts are hardworking, yet most investing programs do not yield good results. So, while physical strength and endurance still matters, it does little in separating investors.

Investors who are intelligent can acquire a proper understanding of a subject with speed and accuracy. Yet, plenty of such investors can still lose money. The past year serves as a telling example: some intelligent investors sold their holdings at the worst possible times, because there was too much to handle on the emotional and psychological side. So, intellectual strength alone does not guarantee investment success.

Clearly, something higher than physical strength and intellectual strength is needed. And I believe that is mental strength. Do not panic. Stay calm. To see life when others see death. To be hopeful when others are hopeless. Perhaps, in searching for “enlightened investors,” mental strength is part of what we are looking for. Perhaps, mental strength simply cannot be taught. It comes from not how many books one has read, nor how many shiny things one has on his or her resume. But it comes from the extraordinary experiences one has personally lived through. Teachers do not make sublime geniuses; sublime geniuses educate themselves.

With mental strength in place, peace expands, and anxiety drains away. A relaxed mind can view and process the internal world. White space is created. One starts to see invisible patterns and obtain unusual insights.

In those darkest moments in 2022, when many investors were howling in pain, two sentences entered my mind. I heard them loud, and I wrote them down right away:

• Have the courage to seek truth.
• Have hope that is unwavering.

The Relationship Between Cyclicality and Secularity

It became evident to me during 2022 that cyclical and secular are two sides of the same coin. They are connected in the following sense: the reason we experience huge cyclical moves in asset prices is because our own secular views are not as stable as we think they are.

By the definition of being secular, secular views should be stable. We think they are, yet they may not be so. When our secular views wobbles, shifts, shockwaves are generated, leading to huge cyclical ups and downs in asset prices. Therefore, the unstable nature of secular views causes huge cyclicality.

If I can better identify secular views that are unstable in nature, I can better predict cyclical moves that are sometimes huge.

Language and Us

I have long been fascinated by the power of language, of how a language empowers us or holds us captive. If we do not have a word in our language, we are less able to think about that subject. If we do not have a form of structure in our language, we will not be able to think in that particular manner. Language facilitates our thinking process. Without knowing a particular language, one may never be able to get to the same place as others might.

Yet, our relationship with language is a two-way relationship. We master a language, and at the same time, the language masters us. Language, through its vocabulary and grammar, carries histories, morals, and values, which creates biases in us. The host is unlikely to be able to identify these biases. Language masters the host, without the host’s permission. The host is in the language, and the language is in the host. It is like asking a fish to see water.

So, be aware when a language masters you!

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