Stock Market

Two pains in Life applicable to investing for SP:SPX by dchua1969

There are two pains in life – pains of regret or pains of discipline.

It is easy for us to fall into our comfort zone and let our lazy bones, procrastination, fear, lack of knowledge, ignorance, stubbornness,etc take over us. When that happens, our actions are delayed at best if not, paralysed. We get into a vicious cycle of analysis paralysis stage and often could not get out from it until an intervention occurs.

On the contrary, if we are clear of our goals, optimistic and charged up towards our outcome then the process might be full of pain as it requires tons of discipline to do the same boring days day in night out. Think of going to the gym ? You do not build muscles carrying the heaviest weights in the gym over night. Like my recent attempt to hit a certain milestone in my running journey. It takes weeks of practice, rain or shine.

In the path of investing, I believe the same concepts apply. Pains of Discipline , to me refers to feeling the pulse of the market and be prepared to enter the market when opportunities arise. One good example is the SVB saga which happened recently. This has in some way rock the financial banks in US and caused some shake up in their price action. To me, this is the opportunity that Mr Market is offering to us , the investors. The top tier banks like JP Morgan, Citibank, BAC , etc are in much better shape than the 2008 financial crisis. More reserves are set up as contingency and with the FED continuing to raise interest rates, it will only benefit the banks.

On hindsight, when one take a look at the weekly charts of stocks like Tesla , Meta, Amazon, Apple , to name a few, we regretted why didn’t we put in more money back then. It is futile to make such silly comments as it serves no purpose. Unless the business of these great companies have deteriorated or loses its economic moats ,then we can speculate with a great margin of safety to say their future business operation remains bright . And if the latter is true (supported by their strong financials), then when a singular event happens that disrupt the market equilibrium and shake up the stock market, are we wise enough, sharp enough to take notice ? Or are we allowing the noises of the market to sway our emotions? Especially when we see red candles ? Or the market gurus who selfishly wanted to buy cheap and yet say the bear market is here to stay ?

Discipline is a sweet form of pain because in the short term, you have to commit yourself to the rituals – scanning the macroview of the market, understanding the relationship of swan events and its impact on the market. And like running, if you do it diligently, your stamina would improve and your legs would be stronger and fitter to bring you further. And you would be able to take in better scenic views and at the end of the run, you will feel more accomplished, confident and healthier.

Such benefits are also applicable in the path of investing!

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