Divorce, Denial, Dissonance Reduction

Neckar writes:

A few years later, I met a new friend….

Then he read a book that I had mentioned to him but merely skimmed myself: The Big Money by former mutual manager Fred Kobrick. A book about a simple idea: finding great companies and holding them as they prospered.

My friend must have been tired of not making money in the bull market because he quickly started pivoting to these new ideas. He started with the obvious “great companies” like the FANG stocks. Next came emerging players like Shopify. Then Bitcoin. These weren’t unique insights. He just opened his mind to ideas evangelized by others.

He shifted from looking for observable valuation discounts to a focus on quality and growth prospects. And he stopped caring about whether he had an edge…

Of course, he would share his new insights with me. And every time I pulled up the charts, I had the same stupid thought: “up and to the right! Look at that! Guess I’m late again!” I was instinctively worried of being the last fool to buy into the trend. Worse, I was envious. How was it possible that anything he touched turned out a winner?

I failed to fully and truly grasp that my friend bought stocks as they went up, and because they went up. And mostly they just kept going. When they pulled back, or crashed, as Bitcoin did, he added more.

I got irritated. I wasn’t interested in hearing about his stocks picks anymore. Enough! I had missed out already and it was annoying me. I did not want to investigate or invest in whatever he thought of next because I didn’t want it to be true. I did not want to admit that what he did was working. That I should perhaps seriously consider changing my mind. Or at least be happy for him.

Because it was obvious that he was doing well. And I wasn’t. My envy turned into resentment. First, we stopped talking about stocks. Then we talked less in general. Speaking with him reminded me of all the mistakes I had made. And continued to make. I stopped being in touch with him as a kind of dissonance-reduction strategy. You could say I was more comfortable in my misery, avoiding all reminders that life could be different.

“Whatever you look for in markets, you will find.”

I am convinced we both found in the market a reflection of our personal lives and beliefs.

By the time my friend changed his mind, he was freshly married and would soon welcome his first child into the world. He was deeply involved in his community. He had accepted his well-paying job as a dead-end that supported his path to financial freedom for as long as he needed it. Why wouldn’t the world be filled with opportunities to make money?

I, on the other hand, was on the warpath with my career. And I was in complete denial about the impact of my recent divorce. I had lost my great love and best friend. I did not like to admit this, but I was miserable and angry. And I felt that the world was terribly unfair.