Lessons from Paryushan Mahaparva – and how they Apply to Investing

It is a time to reflect, introspect and seek forgiveness. Everyone needs a reset button, a Ctrl-Alt-Del mode where we can just reboot and restart. We often, especially in the markets wildly sway between our emotions and most of us wish that we could have just done somethings differently or behaved differently or given another chance, when faced with defining moments.

While it’s impossible to go back in time and rectify your outer deeds, it’s easier to clean, audit and analyse our inner balance sheet, our inner score card and the significance of Paryushan in Jainism is one such opportunity which can be analogised with our journey as investors. Its founding pillars have many valuable lessons to imbibe, and we can draw so many parallels for them in the investing world.

Paryushan stands for practices like Non-Violence (Ahimsa), Self-discipline (Sanyam), Fasting (Tapah), Study of scriptures (Swadhyay), Introspection (Pratikraman), Repentance (Prayaschitta). Incorporating and applying these practices as process in your investing process can tremendously improve one as an investor.

Ahimsa:

In Jainism, ahimsa is the standard by which all actions are judged. Practising ahimsa makes oneself aware of their environment. It makes people more empathetic towards others, which makes us humble. Jainism tries to imbibe humility in individuals by making them appreciate the tiniest of living being and empathising with them.

Humility is an important trait for an investor. As they say, there are old investors and there are bold investors, but there are no old and bold investors. It is because market has humbled them many a times and they have learnt their lessons. Humility is a discipline that can help protect investors from letting their emotions overrule their common sense.

Sanyam:

Jainism encourages Individuals to maintain whatever self-control is possible. Discipline and self-control are a large factor to navigate the various ups and downs of the market. As Warren Buffet says “We don’t have to be smarter than the rest. We must be more disciplined than the rest.”

Tapah:

Fasting instils discipline and helps in building will power to delay gratification. According to Jain texts, abstaining from the pleasures of the five senses such as sounds and dwelling in the self, in deep concentration is fasting (upavāsa). Knowing your circle of competence and ‘practicing’ upvas’ of other sectors shows great discipline.

Delayed gratification is a muscle that you can grow to serve your future selves. Delayed gratification is the ability to resist the temptation of instant pleasure, it helps you overcome your impulses. Benefits of delayed gratification should be well enshrined in the minds of investors if they want to succeed.

Swadhyay:

The simple meaning of Swädhyäy is “to study.” The word Swädhyäy consists of two words, Sva and Adhyäya. Sva means self, and (soul is the self).  Adhyäya means study. Therefore, Swädhyäy means a study of one’s own self.  Reading, listening to and reflecting on the life elevating teachings is useful in keeping the mind healthy.

Warren Buffett is known to be a voracious reader. Charlie Munger is described by his children as book with legs. They claim to read at least 500 pages per day. One who does not read has no advantage over a person who cannot read. At the end of the day, good investing requires the collation of large amounts of information. It is a pre-requisite for successful investing.

Pratikraman:

“Prati” means “back” and “kraman” means “to go”. It means to go back, to reflect and review, to confess and atone, asking for forgiveness from others for one’s own faults of mind, body, and speech in one’s daily activities, and forgiving faults of others and extending friendship to all.

It helps to reflect and introspect occasionally to get rid of our biases. There is no other way an investor can be liberated unless he is free of all biases be it confirmation bias, hindsight bias or even loss aversion biases.  There is no way an investor can get liberated if he is not free from ego, as Warren Buffet said it succinctly “Failure comes from ego, greed, envy, fear, imitation. I have success not because I am smart, but because I am rational. One can achieve rationality only by reflecting on one’s own behaviour.

There are and will be many moments in our investing journey, when we are blinded by ego in our wins and successes or thundered by negativity and pessimism in unfavourable times but what gets lost in the din is the need for equanimity and calm, as Howard Marks says the superior investor is mature, rational, analytical, objective, and unemotional.”

Prayaschitta:

Finally, repentance, forgiveness, and acceptance of the supreme nature of the markets is the ultimate knowledge. As Seth Klarman said, “We know that we are fallible and must therefore consider the possibility that for every investment we make we may be wrong” Being egoless and accepting our mistakes will be the ultimate forgiveness seek from the markets.

It’s the gruelling unforgiving nature of markets, its full of events, scenarios, results, and views. Somewhere between the facts, interpretations and hubris is our basis for a successful investment and as investors and students of the markets, we, perhaps too should follow a similar soul searching “parva” to reflect on our actions and inactions in our journey and quest to become better and wiser investors.

Markets are always full of regrets. I wish I had deployed more in March 2020. I wish I had bought more of my winners. I wish I had gotten rid of my losers sooner. Markets are filled with regrets. Quickly overcoming the regrets and not repeating those “sins” is the way to nirvana in investing.

In conclusion, on the last day it is customary to request forgiveness from everyone we know and meet by saying

“Michhami Dukkadam”

In addition to requesting forgiveness, one must grant forgiveness too. Thus, by forgiving everyone and requesting forgiveness from all we clean and clear our conscience and seek a better approach to investing.

Curtesy : https://www.valuequest.in/vq-perspective-lessons-from-paryushan-mahaparva-and-how-they-apply-to-investing/