The Psychology of Trading, page-128

During times of uncertainty, conflicting information from different sources, wild swings up or down, long term investors need a certain quality. Resilience. The Cambridge English dictionary defines resilience as "the ability to be happy, successful, etc. again after something difficult or bad has happened". Now I am in no way suggesting, that something bad has happened to Mesoblast quiet the contrary. However Mesoblast investors resilience has been tested for a long time. False starts, missed PE, partners pulling out, FDA rejection etc. Probably some of the more testing issues at the moment are the trolls and bullies, which try to sow doubt in peoples minds. The bad news is, that resilience will be always needed in all aspects of life and not just investing.

Resilience is a fairly new concept in psychology and was first used in early 1970. The term resilience suggests, that it is not the nature of the problem which matters, but how we deal with the difficulty. Resilience can be split into emotional and mental - however I will not distinguish them here. I would argue, that investors who lack resilience for example will sell their shares as soon as they hear that a PE has not been reached, whilst the resilient investors will look at the data first. How many people sold, when the heard that the PE for the heart trials failed? On the other hand how many institutional investors sold? The difficulty with resilience is, that it is an innate quality. A number which makes the round is, that one in six children possesses this quality. Now the good news. Resilience can be trained to certain extend.

To build your resilience try to control your thoughts (and not the other way around), reflect on your part of the problem (does the company suck or did you pick the wrong entry, overextended your position etc.), put the event into perspective (you lost money but it is a paper loss, I am healthy, I can learn from my mistakes etc.), set achievable goals (maybe retiring next year is off), be proactive instead of helpless (start reading books, read quality posts on HC etc.), be mindful of your mental and physical state (exercise, meditate etc.). There are of course more ways to build your resilience, but it is a start.

To build investor resilience is an active process. This in itself builds your resilience and helps you control your feelings of helplessness, despair, frustration, anger etc. People who lack resilience in face of adversity are often not resourceful in moments of stress and slip easily into their amygdala or even worse old traumas of loss and despair get triggered. So during these boring times, instead of just waiting for the next announcement or the next bait from a troll why not get proactive and build on your resilience?