One of the most difficult issues with holding Mesoblast shares...

One of the most difficult issues with holding Mesoblast shares is the unpredictability of the share price. Each announcement brings a wild swing up or down. This causes the holders feelings of elation, joy, happiness of the perceived impending riches or vice versa stress, anxiety and frustration at the perceived loss. I say perceived because as long as you don’t sell the shares it is a gain or loss only on paper. One could say, the feelings are real but the reason is a lie. Nobody knows for certain how the story of Mesoblast will end, let alone continue next week!

So how does one cope with a wild roller coaster ride like this? First of all one needs to constantly remind oneself that Mesoblast is a speculative stock and therefore these wild fluctuations are be expected. I would say that most people are aware of this. Why is it then so difficult to cope with these price movements? The main reason would be, that people build up hope for a variate of reasons like early retirement, cure for the sick children, buying a new car etc. When that hope is crushed the feelings of despair and fear take over. All these are actually normal reactions. It happens in our daily life too.

However people behave differently when confronted with difficulties. Some thrive when confronted with difficulties and it brings the best in them out, whilst others struggle and lash out or freeze or worst of all go into self-destructive behaviour patterns. On HC it is often obvious who falls into which category. Let’s look only at the first category. When for example it was announced that the primary endpoints for CHF were not achieved the resourceful investors started immediately looking at the details of the announcement. They understood that Mesoblast is not one or two announcements but a journey with lots of different moving parts and they calmed the collective Angst on HC. They were able to do this through careful analysis of facts!

These posters model and possess something very important when it comes to investing as well as life in general. Namely resilience. The definition of resilience is, the capacity to recover quickly from difficulties. The characteristics of resilience are control, competence, coping, confidence, connection, character and contribution. If you're less resilient, you are more likely to dwell on problems, feel overwhelmed, use unhealthy coping tactics to handle stress, and develop anxiety and depression. One is to a certain extend born with resilience but it can also be developed later in life. It is never too late to teach an old dog new tricks. The science is settled, we can even in old age create new neural pathways.

Resilience is important as most humans crave stability, normality and structure but not always get it. Sadly the owners of Mesoblast shares get very little stability. I cannot see this change in the foreseeable future, and there is nothing I can do about it. What I can however influence is, that I control my feelings, read competent posters contributions, believe in the journey (and not just focus on a single announcement), connect to other investors and contribute in my own little way. All this fosters my resilience.

In no way would I presume to suggest that people who sold their shares are not or less resilient. Far from it, they may show their resilience by making a though decision by selling their shares. What I am trying to elude to is, that those who stay the course may need to be conscious of this important element of resilience and foster it whenever possible.