Key Investment Learnings from the Life of Stephen Hawking

When Stephen Hawking, the world renowned physicist, passed away on March 14th 2018, there was more a sense of awe and admiration rather than grief. Here was a man who had achieved so much despite the obvious challenges that he had faced. Hawking had done groundbreaking work on “Black Holes” and Cosmology during his lifetime. During his life he wrote 15 books with the intent of making the mysteries of the universe accessible to everyone. In fact, one of his best selling books, “A brief history of time” sold millions of copies worldwide and has been translated into 40 languages.

Most notable about Hawking was that he was struck with Amyotrophic Lateral Sclerosis (ALS), a debilitating disease which wastes away your body and nerves over time and has no known cure. But the fact that Hawking survived for over 55 years after that and made such a huge contribution to science is truly inspiring. As students of capital markets, there are some key lessons that investors can learn and imbibe to become better investors. What are they?

8 lessons that investors can learn from Stephen Hawking…

Stephen Hawking’s life has been a life of constant search and a case study in overcoming the odds of health and practical challenges. Here are 8 lessons, or rather inspirations that every investor can actually draw from the life and times of Stephen Hawking…

• Don’t be bogged down by the challenges

The next time you feel that you are having a bad time with most of you investment decisions going wrong, just think of Stephen Hawking. Here is a man who was afflicted with a unique form of incurable sclerosis. Here is a man who was literally confined to a wheelchair all his life and could never hope to lead a normal life ever again. But that did not reduce his sense of optimism and his hope that he could actually contribute towards opening the secrets to humanity. That is the key in investing. You will be bogged down by bad markets, bad decisions and bad timing. Just keep the bigger picture in mind and keep plugging away. Optimism is the key!

• Always be curious about new ideas

One of the reasons Stephen Hawking could achieve so much despite his challenges was his insatiable curiosity for new ideas and learnings. Hawking not only understood the mysteries of the cosmos and the universe but also translated these things into simple form for others to understand. As an investor you need to be curious about new ideas. Why did you go wrong and what have other investors done right? What are the trends and underlying themes that you missed out? What are the big themes that you need to read up on to eventually translate them into investment ideas. Like Warren Buffett said, “Read a lot and have an insatiable thirst for new ideas”.

• Treat your losses with a sense of humour

That may sound quite sadistic but just listen in to what Hawking had to say. “Keeping an active mind and maintaining a sense of humour is the key to my survival”, Hawking had said. That was the reason why Hawking survived ALS for so long despite all his motor functions failing him. As an investor or a trader, you need to bring a sense of dry humour into your losses. Don’t overly lose sleep over your losses; they are part and parcel of your investing activity.

• To be a successful investor, just keep it simple

That is what we learnt from Hawking’s books. Understanding the cosmos and its mysteries is one thing but to simplify and present it for others to understand is another thing altogether. Buffett used to say that if you have a good idea illustrate with a piece of chalk. That should be your principle as an investor. Keep it simple and keep it organized. Don’t complicate things as it does not solve anything.

• Time is your most precious resource, use it well

Imagine a man who knows that his body was wasting away and yet survived for a full 55 years to make immense contribution to understanding the mysteries of the universe. That is called fruitful use of time. That is a lesson that all investors must learn from Hawking. You have a universe of 1000 possible stocks and a plethora of information. Your focus should be to utilize time properly. You must also understand the value of time in your investment decisions. Be quick and be decisive and treat time with respect. The rest will follow.

• Talk and share your ideas, you could actually benefit as an investor

A lot of us tend to believe that the key to success is playing our cards close to our chest, especially in the investment arena. Hawking brings a new perspective altogether. His entire life was dedicated to sharing his knowledge through books, research papers, lectures and demonstrations; and all this notwithstanding his failing motor functions. There is a lesson for all investors in this. You need to be more open about sharing ideas and exchanging notes. For all you know, you may end up richer as some new perspective may spring up that may answer many of your questions.

• If you want to be a successful investor, simply never give up

We all know about the virtues of being indefatigable. Just don’t give up, is an underlying theme you need to imbibe if you want to be a successful investor. Ask any successful investor and they will tell you that they had to do many things wrong before doing things right. The key is to never give up. There is really no better example of this than Stephen Hawking. He not only overcame the challenge but ensured that his 55 years post the diagnosis of ALS was utilized with immense productivity.

• Be willing to accept disruptions, you could end up being a much better investor

It does not matter if you are up against disruptions; learn to accept and make the best of it. Hawking displayed that quality to perfection as he made a virtue of every negative disruption in his life and his career. When you find your portfolio performance being disrupted by some major changes, ask yourself how you want to capitalize on it, rather than how to face it. When Apple disrupted the communication industry, do you want to be a Samsung or a Nokia?

Interestingly, Stephen Hawking was born on the 300th death anniversary of Galileo and he died on the 139th birth anniversary of Albert Einstein. Between the three of them they prised open the mysteries of the universe. Some things in the world of physics are truly continuous and seamless.