One of my favourite quotes is from Shakespeare’s Hamlet: “There is nothing good or bad but thinking makes it so.” I am not getting into the meaning of this line in Hamlet, but it’s such a powerful line with loads of relevance to investing.
Reread the line, “There is nothing good or bad but thinking makes it so.”
Now let us get back to investing.
Any event in the market seems like THE EVENT.
Take the example of last week’s “Evergrande”. It seemed like THE EVENT that is going to cause havoc. Maybe it will; Maybe it might not. The point is not whether it will or will not and I am not getting into the specifics of the event and its impact.
The point is that when any such EVENT happens, we magnify the impact of the EVENT in our mind. We give it VALUE.
We have the Power. We have the choice. We can either magnify it, pay attention or ignore it.
Truth be told, Events are generally neutral. I mean they are a part of Evolution.
Can they cause short term pain? Yes.
Will they end the world? No.
After some new event has been discovered, the impact of the current event seems to evaporate from our mind and some new one takes its place.
Some events have the power of bringing back the memories of past events. For example, “Evergrande brought back the memories of Lehman Brothers.”
The reality is that “THE EVENT” only gains positive or negative value in our mind.
In Short, there will always be “THE EVENTS” in this world. In short, there will always be reasons to not INVEST or to Interrupt Compounding.