Invert … Always Invert …

The last six months were very daunting. One of my friends was suffering from cancer. Post-operation, he had to get admitted to hospital frequently for chemo. I used to visit the hospital to see him. It was a very painful ordeal. I have been there, and done that. But still, it hurts. It badly hurts.

Whenever I used to drive to the hospital, two thoughts arose in my mind. The first one is to thank the almighty for keeping me and my family healthy. And the second, “What if I would have been in a similar situation?”

This thought used to fill me with empathy, love, and compassion. And also makes me realize what worse can happen.

The first thought is about “attitude of gratitude.”

The second is the “inversion technique.”

Carl Jacobi was a German mathematician born in 1804. He used to solve complex mathematical problems by expressing them in reverse. He devised a simple strategy called, “invert, always invert.”

He used to restate the problem in reverse order and realized that the answers came easily. This is called inversion thinking or the power of inversion. In this technique, you try to solve a problem by asking what will happen if the opposite is true. Thought leaders, scientists, businessmen, and successful investors have effectively applied this technique in every field.

In daily life, we confront many difficult situations. However, we can make our lives less miserable by inversion. Almost all life-questions, if addressed through the inversion technique, make life simple and happy. If one can master this art of inversion, you will rarely fail in your life.

In spirituality, there is a concept called, “mortality meditation.” In this meditation technique, before getting out of bed every morning, you visualize that today is your last day on this planet. And then live this entire day with this awakening. If you follow mortality meditation, you will never get entangled in petty issues like ego, jealousy, or hatred. There will be no time for such useless stuff. You will only focus on the most essential things in life and let go of many that are insignificant. This is a very powerful way to live a happy life.

If you live your life with this awareness that death can strike at any moment; you will approach life with a different perspective. If every minute you are conscious of the fact that you have a limited amount of time, you will behave differently, and your outlook towards life will change completely.

Rather than thinking about how to make life happy, if you reverse and address the core issue of “What can make my life miserable?” you will act more diligently.

When you curse your job every day, and have Monday blues, ask, “What will happen if I lose my job now?” You will either start loving your job or prepare for the worst.

If you want your children to do well in life, rather than telling them what they should do, tell them what they must avoid.

Just like in daily life, we can effectively apply this technique in investing as well.

Rather than asking, “When will I become rich?” Ask the question, “How can I lose money in the stock market” or “How will I go broke?” You will behave more wisely.

Rather than asking, “How much return will I get?” Ask, “What is the risk I am getting into?”

If you want to invest in a stock, then rather than asking the question, “When will it double?” Ask, “What if it will become zero?”

This is the precise reason, we, at “Defensive Investments” always focus on risk rather than returns. We look at things upside down. We are aware of the fact that the pain of losing money is more acute and long-lasting than the joy of doubling. So, it is prudent to focus energy on how to avoid that pain.

The great Charlie Munger adopted this inversion technique very successfully throughout his life. He has famously said:-

“All I want to know is where I am going to die and I will never go there.”