When did you teach yourself to fail at investing?

Hidden self learned helplessness is your greatest demon

Hi ,

A great quote in my mind today is “I have never tried that before, so I think I should definitely be able to do that”.

It’s from the children’s book character Pippi Longstocking by the author Astrid Lindgren. You know Pippi, the freckled red-haired girl that can lift her speckled horse.

How often do you feel friction in trying something new?

​Ever thought about what this does to your investing prospects?

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Most children have no problems trying new stuff and taking risks.

They haven’t yet built up a long memory of failures and disappointed adults scolding them because they didn’t do what is considered the right way.

Making a decision, as an adult is much much harder. Or at least we make it so.

Will my next action result in some form of discomfort?

Who will I disappoint if I do this?

And what if I make a mistake?

What consequences will I have to face? Second order? Third order?

These are difficult considerations. If pulled into our focus all at once, one would have to be a masochist to try anything new.

Or we could just follow Richard Branson’s approach and say “Screw it, let’s do it”.

Limiting oneself because of mental self-talk is part of the issue of self-learned helplessness.

Over time we stop taking risks and trying new things, dismissing the opportunity, presuming nothing valuable will come out of it.

Keeping at it, we simply assume certain things are just not for us.

You might be thinking I’m talking about big decisions like career changes, starting a company, deciding to invest one’s life savings actively by oneself, sky-diving.

In truth, it applies to all the little daily decisions even more.

Life happens in small steps. One at a time.

This is where we sabotage ourselves without realizing.

Trying some new spice on a recipe at the risk of an inedible outcome?

Taking another path to the groceries than the usual?

Trying a cold shower just to see how long we can resist not because some influencer said so but just for the sake of personal challenge. Like as a kid, when trying to see how many steps you could jump down from.

Risk perception and management is subjective.

How you perceive something as risky depends on how much experience you have with it. The more experience you have with something, the more confidence you have in your ability to manage the risk.

And here is the nugget: the more you are used to taking small risks, the more comfortable you become with risks that carry larger responsibility.

In my “Learn to invest confidently in 30 days” course I see many cases of subtle hidden self-learned helplessness.

When things get difficult in the market or when mistakes are made, students default back to their comfort zones, instead of getting excited and venturing anew from a different angle.

To invest and even more so to trade successfully, one needs to be comfortable taking controlled risks and trying new things.

This is the fastest way to learn. Learning slowly means losing money in this game.

Haven’t invested in crypto yet?

Haven’t tried shorting?

Haven’t added a low-risk strategy portfolio based on ETFs and DCAing?

Pippi would probably ace investing quite fast.

What about you?

Have a good week ahead,

​Chris

Thank you for reading! :)

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