They say, ‘Pain is the price of being alive’. I believe it is the cost for staying alive. 

Voltage gated sodium channels regulate the flow of sodium ions that can activate pain receptors in our peripheral nervous system. Blocked sodium channels and we are left with no sensation of pain. No realisation of broken bones or inflamed muscles. No memory of the event. 

As a child, we cycled near our houses. Would we today, a few decades later, remember every ride we took? Unless one is a prodigy of epic proportions, we would not remember every single ride. When we do recall memories from our time as a child on the bicycle, it will almost always involve a painful accident. A fall in the gutter (as was the case for me), a tumble down the bridge into a rickshaw (as was the case for me, again) or simply the inability to balance resulting in a painful, funny fall. 

Pain, therefore, is associated with our memory making process. These painful experiences are the ones we hold on to, the ones we distill learnings from and pass on to our future generations. The cellular memory of the pain tells us to not touch a hot plate or to not speed while riding down a bridge! And nothing results in more impactful learning than those from painful mistakes. This makes us ‘fitter’ from an evolutionary standpoint. It teaches us what dangers must we avoid in order to survive, live longer. Pain, hence, is the cost we pay to live longer. 

Borrowing from Nassim Nicholas Taleb- pain is what makes us ‘antifragile’. Antifragile alludes to the notion that shocks or disruptions make us stronger/ creative/ more adept at surviving. Or to put it colloquially “What does not kill you only makes you stronger”. Pain makes memories sticky and consequently the learnings linger on. Perhaps us learn to swerve way before we used to, so that we do not end up in the gutter; or we learn to apply brakes quicker, riding downhill or perhaps it teaches us to survive the next drawdown better. 

Drawdowns are crucial to our survival and evolution as a long term investor. The pain of living through the drawdown teaches us what not to do. The last ten months in the Indian public equities market would have possibly exposed the folly of our ways in the few months leading up to the drawdown. The drawdown also educated us about our own temperament as an investor and what our real risk appetite is; a learning that the gilded age in Indian stock market investing (2017) could not have given us. 

It is this very drawdown (that we all love to curse) that can make our portfolios antifragile. The pain exposes the errors of our ways in certain ideas. We find ourselves willing to add to certain positions in our portfolio but not all in the fall. This itself reveals a lot to us as investors- even with no additional information, it makes apparent the gaps in our ideas, the frailty in our thoughts.  The downturn exposes the strengths and weaknesses of our portfolio (which is distinct from a simple price quote). This combined with the learnings about the market as well as our own behaviour as investors, enables us to survive longer in the market. Without this downturn, our retention of market learnings would be negligible. Buffet quotes would have made for great posters in the office without us imbibing any wisdom from those. The downturns therefore are an investor’s voltage gated sodium channel. Taking the right cues from it as nature does, will enable us to become antifragile investors. Going on for a prolonged period without this- we are likely to meet in a fatal accident without even realising it.  

Note: The idea for this piece came upon reading the following article from the Wired: How a Single Gene Could Become A Volume Knob For Pain.