Wabi-Sabi and Investing
After reading some books about investing and lifestyle, I have learned to apply certain aspects of certain lifestyles into my views as an investor. One thing that has partfully changed my mindset as an investor is wabi-sabi.
Being an investor can be quite tough at times, sometimes it could look like a psychological game. Let’s say that Company A has had a good run for a while (stock price going up),then you might be thinking about selling the stocks you own of Company A. You could also be too scared to buy more stocks because you think that you are simply “too late” to jump on the train. Another example: The stockprice of Company B has dropped, that might be the reason why you are selling the stocks you own out of fear, or maybe you would like to buy more stocks because you believe that the dip is an ideal moment to buy more stocks, because you think that the price will eventually go up.
Because we tend to take certain actions with our natural human instincts, I try to ease my mind as an investor by using the views of wabi-sabi to disable a part of my emotional mindstate as an investor. I will tell you how and why this has helped me to become a better investor, and how you can become a better investor by applying only a couple of simple rules into your mindset as an investor.
“When you cannot control your emotions, you cannot control your money.” and “It is not necessary to do extraordinary things to get extraordinary results.” — Warren Buffett.
These quotes from Warren Buffett are two examples of using wabi-sabi into your mindset as an investor. I for example always tell people that we cannot completely predict future, but if we try to be at least a tiny bit optimistic, results will not disappoint. With this I am not telling everyone to just invest into a sketchy company (like Nikola) and force yourself to be optimistic about the future of the company (you should also do your own due diligence). However, I do want everyone to be optimistic about the investments they truly believe in for the long term. Your emotions might change a lot throughout time, so it is important to have the same vision for your investments, as long as there are no bad fundamental changes in a company (or companies).
The way how I use “wabi-sabi” to make me a more optimistic long term growth investor, is by simply accepting certain imperfections. I for example am a big believer in the future of Tesla, but are they a perfect company? Simple answer: No. There is no company which does everything perfect, but most people forget that imperfections can also become opportunities. Eventhough we all strive to become perfect, we all know that it is non-existent. So why not accept it and appreciate the fact that we can only improve? A broken canvas can be turned into a famous artwork, an assymetric face can be unique, all in all, simplicity is key.
To wrap it all up, I am a firm believer that accepting certain flaws (as long if it is something not too crazy) as an investor is something we should be learn to live with. I understand that we strive for something greater (which we should be!), but by partfully accepting the fact that every company has a number of imperfections, we can change our views on our investments. Do not overthink about certain risks a company might have, we all have our good and bad investments. Try to put your emotions on the sidelines, by looking at all (potential) good things the companies you own are doing. Keep in mind that this could be one of many views you can adapt into your investing mentality, just like I also have multiple views on investing. This is simply one that I do not hear too often and wanted to share.
(Postscriptum, I am not a financial advisor.)
