Investing is not like running a marathon, like cooking, it is not a sport – it is managing your emotions. It is a battle that you have with yourself. Conquering fear – as well as over optimism is the key to take the middle path. It is not easy, because of the chemicals in your brain. Remember Prashant Jain, Santosh Kamath, Naren, Samir Arora – were all middle class boys a couple of decades ago. Money management has been learnt, and all these people (and a few others) have learnt how to control their fear. I am not sure whether any training is available for this, but these people have mastered it. At least for me staying away from the market was possible, but for fund managers they had to be in the market. It is not easy, I can assure you.

It is very important to know that the brain reacts to fear. So even if I say “market crash” for an equity investor, and words like “default risk” or “downgrade” for a debt fund manager must be scary. Your nostrils fare up, you start sweating, and of course you are worried and you do panic. Sure meditation will help, but learning Vipasana is not easy. Vallabh Bhansali is a Vipasana expert, and that must be keeping him calm with his fund management. No clue what Rakesh Jhunjhunwala does, he does not look like the meditating type!

The countless number of people who withdraw from the market when there is trouble are the ones who lose money for not sitting tight. 1999 was a bad year…and till 2001 it went nowhere. I know Advisers who asked people to withdraw in 2002/3 telling them “see at least the Nav is Rs. 10” – getting people to shift from equity to debt! Fair enough I guess.

So what all do I do?

1. Convert the data to cash implication: How much can I lose if say Indigo goes down to Rs.1200? Rs. 5L? Rs.10L. As an impact on my TOTAL portfolio, this does not look scary.
2. Taking a deep breath and saying “I will look at it later”. This happens even when you are stuck in traffic – and you are headed to the airport to take a flight. Just close your eyes, take a deep breath and tell yourself that there is always the next flight to your destination. Cost of traffic jam? Rs. 8000 for a new ticket. Again not so dangerous, right?
3. Rethink the share at a fresh price. Say you bought Indigo at 1560, and now the price is Rs. 1380, Are you comfortable at that price? say  at 20% fall from 1560 – say at 1200? Did you anticipate these prices when you bought this at 1560? I surely do. I am normally prepared for a 30% fall. So till here it does not matter. However in shares like DHFL, I had to cut losses and run. I had bought it at 250 – on the way down. No point in holding this till this reaches Rs. 2.50.

These things surely have helped me in my journey. I do not know how the big boys handle it. For them the numbers are much bigger…and they are inundated with calls, emails,  WhatsApp – it can’t be easy to keep the noise away. For me it is.

I also realize that I have a very calm broker (how people buy shares online still beats me) and not a Relationship Manager who hyper ventilates like the television “expert”.

Even sleeping over the decision, drinking water, going for a walk – I know fund managers who do this. I am sure it helps to control the amygdala – the fear portion in your brain is useful.

Have you sat in a scary ride? the Rollercoaster I mean. If you have, you will realize that counting and closing your eyes (fun is lost) helps conquer fear for that moment. In trekking it is the moment when you have to walk very close to the mountain, hugging the mountain because the path is 2 feet and the other side is a 8000 ft fall. Of course you are SHIT scared, but you have no choice. Closing your eyes is not really an option!

Have you seen a horror movie (I don’t see these days)? It raises your pulse – and at that time you need to tell your brain that the head lying on the screen is just some plastic with some ketchup. Controlling the cues is very important. Do that.

Train your mind to remain calm. Not easy, but can and MUST do especially if your are managing a lot of money with constant public scrutiny.