Aswath Damodaran: The Karmic Path To Investing

Johnny HopkinsAswath DamodaranLeave a Comment

In his latest interview with The Hindu BusinessLine, Aswath Damodaran discusses his karmic path to investing. Here’s an excerpt from the interview:

What causes maximum stress to you in investing, and how have you handled it?

This may sound weird, but I have never felt stress from investing. Don’t get me wrong! I get stressed and worried if my wife, kids or extended family get sick, or even if one of them is having a hard time with life. I even feel stressed when my car will not start, or I am running late for a flight. With my investing, I have a test called the sleep test and here is how it goes. If you lie awake at night, wondering and worrying about your portfolio’s gyrations, you have failed the test. I can tell you honestly that I have never lost a night (or even an hour) of sleep over my portfolio, even on its darkest days.

How do you define investing success or failure?

Serenity. If you find a core investment philosophy that fits your personality, you develop strategies that reflected that philosophy and you make your choices after doing as much due diligence, as you can, and the rest is not in your control. Win or lose, I have [done] everything I can, and I don’t second guess myself. Consider it take the karmic path in investing.

You can read a transcript of the entire interview here:

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