Loss is part of life, it is part of investing, it is something that we have to accept as going to happen - but should it ever be easy? Should we ever just shrug it off as if it didn't happen, or should we savor the feeling of pain and make sure that it imprints on us deeply enough that we carry the lesson of that loss forward, always?
If you can shrug off a loss, you can't be a winner.
Vince Lombardi
Perhaps there is something to this, where it is always recommended that never invest what you can't afford to lose completely, it doesn't mean that losing it is not felt. Skin in the game means more than having some money on the line, it is having enough money on the line that if it is lost, it is going to be felt, that the skin is going to be scraped and cut, pain felt.
Loss has to hurt.
If it doesn't hurt, why learn from it?
It is like the playground problem that they have supposedly observed in Australia over the last decades, where since they have made the equipment much safer and padded everything, they have noted a reduction in motor-skills in children. If it doesn't hurt to fall, there is no reason to improve to make sure not to fall. In order to learn from mistakes, the mistakes have to be recognized and pain is a way for us to recognize that error in judgement, whether it be physical pain like falling from play equipment, or psychological pain like incurring a monetary loss on an investment.
But, perhaps we are now living in a society that looks to "ignore the pain" by covering it over, where for example, when we have a headache, we take a painkiller to ease the pain. This takes away our drive to understand the source of the pain and deal with it at the core. Similarly, when people feel emotional pain, the tendency is to take a "pill" that draws the mind away, often through entertainment practices, like gaming or watching TV - an act of avoidance.
There are so many ways nowadays to "self-medicate" so that our pains and discomforts are lessened, that we might be missing key signals that could inform us to change our procedures, or directions in general. This means that we can stay on the "wrong track" far longer than we should, because we haven't felt enough pain yet in order to question what we are doing and find a better way.
At least for most of us, we are unlikely to make any significant changes in our lives unless we are hurting enough, which is why so many of the addicts only act when they recognize that they have hit "rock bottom". Up until that point, most of us seem to put off changing, because it is still bearable.
We can also see this when it comes to entering into a recession, where many people try to maintain their current lifestyle, even though it is coming at an increasing cost, with the extremes being that we will sell off generative assets in order to keep our consumptive habits. This happened a lot in 2008 in Finland for example, where while the sales of luxury cars remained steady, people were selling off summer houses and stocks at lows, as well as taking on additional debt. The result was that people on average were far worse off down the track, because their short-sightedness cost them a long-term position of value. This was common in many countries and the mounting and growing debt burdens are continuing, with no respite in sight.
It seems that people aren't hurting enough.
Where the challenge comes in is that people fear the pain of loss so much, that they do not take risks where that pain can be felt. While this lowers the chances of short-term pain, it will also likely increase the chances of long-term pain, because investments aren't being made to generate or mitigate the risk of the changing world. For illustrative purposes, it is like someone sitting on the couch doing nothing for the fear of the pain of pulling a muscle, but because they do nothing, they are increasingly going to find themselves in pain.
For many, this is a counterintuitive issue, because what they are doing seems right, but over time, it tends to have the opposite effect. From a consumer standpoint, it is like being cheap will mean buying twice, but the reason the cheap was chosen in the first place, was to save money. Similarly, a lot of people who "can't afford to invest" are the ones who should be going out of their way to invest, even if it is painful to do so, because that immediate pain is less impactful than the long-term pain.
However, we aren't very good at predicting how we are going to feel about things in the future, whether positive or negative, so we tend to put a lot more weighting on the current moment. However, investent mindset requires looking down the track a lot further and, being willing to put the immediate desires on hold, in order to turn current resources into more than their current value. It is because of this that most people do not invest well, and those who do, are able to generate so much value overtime, because they know that most people are impatient and they can use time to their advantage.
Just like compound interest can give significant cumulative gains, a lack of interest will likely bring significant cumulative pains. But, because it builds slowly over time and we have been ignoring the low level pain for years whilst focusing on satisfying the immediate desires, we feel that the pain is not our fault, we are victims of circumstance. This is true, we are all victims of our experience, including the conditions we create for ourselves.
It might hurt to realize this.
Whether we learn from the pain or not, that is up to each of us.
Taraz
[ Gen1: Hive ]
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I didn't feel any losses because I'm basically in Hive and know I will earn it all back over time. I may have been left out of the gains but stayed where I was comfortable. I felt the losses in the last bear market.
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The bears can be harsh, but remaining active and interacting on Hive makes it far easier and, a lot more fun whilst building :)
We are veterans of 2016/2017 - we know how low the bar can go.
Funny what experience does - Are you scared? :)
Needed such motivation at the time, thank you😊
Plus, less people are interacting so rewards are easier to come by
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Exactly :)
Learning from our mistakes is also called experience, but if we keep doing mistakes and don't learn, it is known as jeopardy.
In crypto trading many of us think of an overnight profits, such event comes but without knowledge of what we are investing and what we'll get, no technical background or analysis lead us to a gamble with our investment.
I had been into stock and commodity trading some years ago, where I lost a lot but then I realized that I need to study how this whole trading psychology works and it came handy later on. But, learning never ends.
If the mindset is not aligned with the goals, it is unlikely going to work I suspect. Trading isn't for everyone, which is why I limit how much I do :)
Yep right, but idea is to measure the water before you dive. ;)
I'll be honest my Luna loss hurt but I am trying to push it to the back of my mind. What hurt even more is I had started an unstake, found a developer and was ready to start my own Hive project all while keeping some profits to go on a holiday.
That is all dead now.
I have learned to keep a portion of unstaked tokens so I can save some losses if there is a mega crash.
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I tis a challenge with all of these projects, as while they talk about the innovation and security of them, for the most part, the price is just hype and based on very little at all.
Hopefully, the pain doesn't stop you investing, but keeps you more wary of what can happen.
Just came back to building more Hive :) Let's see how it goes
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imo, not a bad way to go.
I never liked that Tranche of coins.
It's funny how different personalities are attracted to certain coins. 🤣
At 40 Billion a lot of people were attracted to it
You are right no pain no gain, I lost significant money in LUNA Scam which makes me more curious about risk management and diversification. Loss are tuition fee which helps you allot in the path to the moon.
Yeah, it seems a lot lost in the LUNA scam - thankfully I didn't get involved with it. I think what has happened after is another part of the scam.
There is the emotional and unemotional.
When dealing with loss, we need to separate the too. Obviously the loss of a loved one falls into the first category and is felt deeply.
Sadly, too many apply that to something like money. This should be unemotional. If we treat losing money like loved ones, we are going to be emotional wrecks.
Losses via investing happens. It cannot be avoided. So we should be prepared for it, shrug it off, and move on. There is always another opportunity.
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Yes. I think it is the same as fear - the same part of the brain processes fear whether we are standing on the edge of a cliff, or worrying about losing face in front of peers. Both seem life threatening.
I learnt something good today, if it doesn't hurt to fall, there is no reason to improve to make sure not to fall. Of course it should hurt to fall, lose or stumble, but what makes us unique? The ability to get back stronger and refined. This is a super post! Would love to read more of it from you.
When people talk about the things that define them, that make them strong - it isn't the good times.
This definitely shouldn't be a surprise especially when been involve in Crypto because it's a 50-50 scenario either you gain or lose but the most important thing is to take the right decision and invest wisely rather than adding greed to it because of massive benefits that can lead to a huge lose.
play the cards right and perhaps it is 60-40 :)
I use my "20 year" theory.
In 20 years, will it matter? As most things become a distant memory.
I apply it to work, relationships, mishaps, positives, and so on.
For example, a friend was complaining about his cousin & his hairbrained schemes &, pie in the sky, talk. It really bothered him to the point of destroying the relationship.
So, I said, add 20 years, he probably won't be around, and you'll miss him dearly.
Because, some of those, pies, have borne fruit, enterprise, other ideas, projects, & revenues.
Sometimes the investments you have are right in the palm of your hand. They are more valuable than a portfolio of numbers & future consternation.
It is interesting that most people are against the pie in the sky ideas, but when they work - they wish they had bought in at the ground level. It takes special kinds of people to have the ideas, and special kinds of people to back them - however, most of them fail :)
I hope that when my daughter has serious hairbrained ideas, I am willing to support her with them, rather than be completely dismissive, because I don't understand.
I think a lot of people are pretty sure that this period of time is only going to be for a couple more weeks/months and that they just have to ride it out, and possibly refuse to consider that there might be other outcomes.
A couple weeks or months.... years... :D
A lot of people still think that crypto is guaranteed - but nothing is. I am preparing myself for the zero.
I have never shrugged off a loss, I have always tried the loss into profit if I have the ropes in my hand.
I don't think that people try to maintain their current lifestyle, but an inferior one. This is like that at least in my country. Many people have been in a poor diet, in which they will likely eat beef once in a year, perhaps milk and milk products once in a month...
I think this is the average yes, but when the recessions hit, rather than making lifestyle changes like cutting back on entertainment, they maintain entertainment, and cut back on quality food. I might not have explained it well :D
A comfort zone is just that, and you will stay stagnant there.
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And then, blame everyone else because how can being comfortable be wrong?
Agreed!!
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I used to be super careful with crypto, but economic situation (massive inflation) forced me to try and search opportunities.
we will see how it goes :)
Don't go crazy!
The losses hurt but the best you can do is move on from them. I think it's best to just learn from the mistakes so you won't repeat them. However, I do agree that some people just never learn (people who buy coins promoted by social media influencers).
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There is a greed aspect to this kind of loss too - people forget why they are getting into it. For me for example, there is more to it than being fiat wealthy, it is about having a positive impact on the world. Failure to become wealthy or to lose money trying to be wealthy, is different to failure trying to make the world a better place in some way.
Interesting your post, focused from what I consider fundamental for success such as effective life habits, our emotions exist for something, just as pain is an alert for us to take care of ourselves or realize a situation, as we must assume the risks in business, of course you have to educate yourself to minimize them however, aware that losses can occur, in the crypto world it is more vulnerable but I see it as super interesting, I am learning and willing to assume during the process for my personal and financial evolution .
The trick is to understand what is a justifiable emotion and what is not. We think our emotions are accurate and they may be, based on what we know, but that doesn't mean what we know is accurate.
I use the illustration of if my wife asks, "How do I look?"
If she hears me say "You look fat!" She is going to have a negative reaction.
But, what if I said "You look fab!" and she misheard?
.
I have been meaning to ask, why "howzat" ?
When I was growing up, it was an Australian cricket thing.
Lol.
It's now common around cricketing nations.
Nowadays,people don't endure pain long enough to see the impact or the opportunity that lie ahead,we often time Satisfy our present desire not knowing that they is a goal ahead, a basketball coach say they is no gain in practice,but without practice they is no gain, really they is no happiness in pain, but without pain they is no happiness , in my own opinion if it don't cause you , you won't value it , so things that cause you pain to achieve give you reason to secure it the most,but if it those not cause you are pain you won't care to value it. In Essense , the pain you go through to achieved something the more value that thing become. That is to say pain is indirectly proportional to value.
It is about experience - if you don't have negative experiences, positive experiences have no impact either and, if only positive, then the least positive are seen as negatives.
Whether we learn from the pain or not, that is up to each of us.— nothing beats experience , in actual fact it is the best lesson teacher .
However, investent mindset requires looking down the track a lot further and, being willing to put the immediate desires on hold, in order to turn current resources into more than their current value. — as they would say , it’s a marathon not a sprint. The former exudes lots of pain, loss of strength, tenacity but never lacks endurance. So it is for investments, it will always yield good returns at the long run.