Dear Young Investor,

I hope this letter finds you well.

I recently found myself in the back seat of a car, nervously clutching my seat belt. I was accompanying a friend teaching his 21-year-old son how to drive.

He was excited and determined to prove he had it all under control. But every time the car lurched, or a dog ran near the road, I noticed the same pattern: he reacted instantly.

He turned the steering wheel too sharply and pressed the accelerator too hard. His body seemed to be acting faster than his mind.

I realised that he knew the traffic rules reasonably well, so each mistake he made wasn’t caused by a lack of knowledge. The mistakes were caused by the speed of his reaction.

I saw in him what I have seen in myself, and in almost every new driver and new investor I have met.

It is the tendency to let the body jump first, the mind follow, and the judgment arrive last.

I am writing to you today about the most dangerous timeframe in investing. It is not the long term, and it is not the short term.

It is the first 90 seconds.

It is that tiny slice of time when you see a piece of news, a stock price movement, or even the rankings of the best mutual funds to buy, and your mind behaves less like a wise capital allocator and more like an over-caffeinated teenager.

This is how it usually happens. You are sitting at your desk, and you see a notification. It may be about a stock you own that has dropped 10%. Or maybe a friend sends you a WhatsApp message saying, “This NFO is the next big thing!” Or you see someone posting on social media how their latest stock pick turned into a 20-bagger within a span of just 2 years.

In that exact moment, a switch flips in your brain. It may be fear, excitement, or envy because you missed out on an opportunity (even when you knew nothing about it) while someone else got richer.

I wish someone had warned me early in my journey that our minds decide emotionally first and rationalise it second. All in under 90 seconds. So, when Charlie Munger said that “we are not rational but rationalising beings,” I understood that he was talking about what we become in those 90 seconds.

If you do not manage this window, everything that follows is just an excuse for an impulse you never examined.

Now, to understand why this happens, let’s quickly understand that our brain was not built for the stock market. It was built for the jungle. For thousands of years, if our ancestors heard a rustle in the bushes, the ones who stopped to analyse usually got eaten. The ones who ran away instantly survived. We are the descendants of the survivors. We are biologically wired to treat uncertainty as a physical threat.

When a stock price drops over a day or week, or a mutual fund underperforms the market for even a month, your survival instinct screams that you are under attack. It floods you with panic and leads you to do something to make the pain stop.

On the flip side, when you see a stock soaring, your brain floods with excitement. It again leads you to do something, but this time so that you don’t miss out on the future gains.

This mechanism kept us alive in the wild. But in the financial markets, it gets us killed. The market is a counter-intuitive place where the thing that feels safest is usually the most dangerous, and the thing that feels scariest is usually the most profitable.

The emotional tone of those first 90 seconds slips in like background music. You don’t notice it, but it shapes the entire atmosphere of your decision.

• A fearful first 90 seconds makes you ignore the long-term quality of a business or fund because you are obsessed with the short-term price movements.
• A greedy first 90 seconds makes you ignore the risks because you are obsessed with the potential reward.
• A defensive first 90 seconds makes you cling to a mistake because you don’t want to admit you were wrong.

So, knowing your biology is working against you, what can you actually do? Here is a practical system I’ve learned over the years to handle the first 90 seconds.

• Physical interruption: When you feel the urge to act triggered by a sharp emotion, physically move away from the screen. Stand up. Get a glass of water. Look out the window. You need to break the visual loop. When you stare at a falling stock price, you are in a trance. Breaking eye contact with the screen breaks the trance.

• Name the emotion: In that pause, ask yourself one question: “What am I feeling right now?”Be honest. Are you feeling FOMO (fear of missing out)? Are you feeling stupid for missing past gains? Are you feeling scared? When you name an emotion, you switch your brain from feeling to thinking. That helps you regain some control.

• 24-Hour rule: If you get a “hot tip” or have a sudden “brilliant idea” to buy a new stock or a fund, enforce a 24-hour waiting period. If the idea is truly good, it will still be good tomorrow morning. If the idea was just a rush of excitement, it will look unappealing after a good night’s sleep. You will be amazed at how many “life-changing” investments you decide not to make simply by sleeping on them.

• Invert the question: Before you act, force yourself to answer this: “If I were not holding this investment, or if I hadn’t seen this news, would I still be doing this?” Often, we sell just to stop the pain of watching a loss. If you wouldn’t sell the business based on its fundamentals, don’t sell it based on your feelings.

I want you to know that the best investors in the world do not have better brains than you. They do not think faster than you. They simply interrupt themselves faster than you.

They have trained themselves to recognise that the first few seconds are a trap. They feel the emotions of fear and greed just like you. But they have built a gap between the feeling and the action. In that gap, they let the logic work its way through their decision making.

So, here is a task for you. The next time you feel the itch to act with your money and investments, catch yourself. Watch the story your mind starts to tell. Watch how quickly your finger wants to click the button.

And then, just pause.

Let the 90 seconds pass. Then let the 24-hours pass.

You will find that on the other side of that pause, you are a different investor. You are no longer a passenger clutching the door handle in panic. You are the driver.

With patience and awareness,
Vishal