“There’s only one requirement of any of us and that is to be courageous. Because courage, as you might know, defines all other human behavior. And, I believe—because I’ve done a little of this myself—pretending to be courageous is just as good as the real thing.”—David Letterman
The question now becomes: how does one learn to have more courage in both life and the markets?
While I think Dave is correct…at first you have no other choice but to pretend to have courage. Sometimes that will be at least provide a start. Unfortunately, courage based on false confidence tends to prove fleeting, especially when money and life are on the line and the opportunity is there for our fears take control.
Very few of us have tremendous courage naturally unless, of course, we have lived in a very sheltered life in which we have not personally experienced tremendous pain, regret, or loss. Painful experiences in the past are often the root cause of our future fears, and when we experience pain, we also learn to respect and avoid what we fear.
Beyond just pretending, I think you also have to also develop the habit of being courageous toward many things that you fear for one reason or the other. One of the ways they train you to be courageous in the military, police, or as a fireman, for example, is to constantly put you into situations where you could be fearful so that you have no choice but to become more comfortable working through that state of fear. You see, the fear never goes away entirely, it will always be there and courage is just a way to allow you to overcome it so you can get the job done in spite of it.
“True courage is being afraid and going ahead and doing your job anyhow.”—Norman Schwarzkopf
In a past mentorship group retreat in Utah, I asked members to list the thing that scared them most away from the market. I then told them, that little by little, they would need to figure out a way in the coming year to address and overcome each of those primary fears as doing so will help them gain confidence and courage in their pursuits in the markets.
One member, for example, was afraid of heights, so to overcome that fear, that member did several skydives. Yet another member was absolutely terrified of public speaking, so I convinced him to join Toastmasters and now he gives presentations at work and has received a very big promotion as a direct result. Suffice it to say, the members who accepted my personal challenge have since reported life-changing experiences and a much different way to approach life and the markets.
We learn courage by directly facing our fears frequently. You will never be able to entirely ignore your fear, but you can figure out ways to work with it. The way you develop courage, especially toward the markets, is to make the process of facing and overcoming fear as natural as a habit as running away from it. Only by doing so, will you have the confidence and courage when you need it the most.
Anything you can do to develop that courage into a way of life and perspective, the better off you will also be in the markets. Achieving success in the markets, or for anything else for that matter, will require tons of courage. The biggest mistakes you will likely make also will be a lack of that courage when most needed.
The lack of courage for you to admit and own up to mistakes you made, the lack of courage to stick with your investment plan when the results have been disappointing, the lack of courage to buy when others are running for the exit doors, the lack of courage to sell as everyone is buying, the lack of courage to refrain from chasing the market and stocks out of fear of missing out, the lack of courage to do your own thing instead of what is popular or which seems smart by the collective herd, and so on.
If you have no courage, you will never be truly successful in the markets. Everything you do in the markets will require courage and a tremendous amount of it. Your ability to be courageous is going to be one of the most important things you will ever learn. Not only in your relationship with the markets, but in also in every part of your life.
Trader Georgi Bozhidarov