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A few weeks ago, on a holiday morning, I did something I knew I shouldn’t do the moment I did it.
I took the Mumbai-Pune Expressway. At the start of a long holiday.
Now, in my defence, I had a plan. I would leave early and beat the traffic before it had a chance to materialise. This is the same plan, I should mention, that approximately four lakh other people on that road had also independently arrived at.
I had even warned a friend the previous evening not to drive on it. He thanked me for the advice. I then proceeded to not take it myself.
Well, an hour later, I was in bumper-to-bumper traffic, going nowhere, and with nothing to do but sit with the frustration and the slowly dawning awareness that I had known exactly this would happen. The expressway had not surprised me. I had surprised myself.
And yet, somewhere that morning, I had genuinely believed this won’t happen to me.
Just think about this. We know that we should sleep early. But we stay up anyway. We know that we eat badly when we are stressed. But we eat badly when we are stressed. We know that checking our phone first thing in the morning puts us in a reactive state for the rest of the day. But many of us still do it before we have even properly woken up.
The knowledge is real. The behaviour is also real. And the two seem to coexist quite peacefully, without much friction between them.
Philosophers call it “inert knowledge,” which sits inside us without ever quite becoming action. Now, it is not ignorance because that can be fixed by learning something. Inert knowledge is when we already know, but just don’t do.
Think about how many times you have given someone what you thought was good and sensible advice, which you yourself were not following at the time. Like a friend going through a difficult relationship, and you told them clearly what you could see from the outside. We are often surprisingly wise about other people’s lives. The knowledge is there. It just doesn’t seem to turn inward very easily.
Why is that? I think part of it is that knowledge, when it enters us through reading or conversation or even hard experience, gets stored as thought. And thought, on its own, has no muscle. It can tell you what to do in great detail. It cannot make you do it. It’s because the ‘doing’ requires something else. You may call it conviction, or just the repeated experience of actually acting on what you know until it becomes second nature rather than good intention.
The other part is that inert knowledge tends to reveal itself only under pressure. There is no gap to see in calm moments. You know you shouldn’t panic in a crisis, and since there is no crisis, the knowledge sits there looking perfectly functional. It is only when the crisis arrives that you discover whether the knowledge was ever really yours or whether you were just renting it.
Consider the state of markets as of now. The BSE-Sensex has fallen over 10% in the past month, while leading stocks from multiple sectors are down 15-30%.
If you have spent any time at all thinking about investing, you know that this is not the moment to make frightened decisions. You know that price and value are different things. You know that the businesses you own did not become worse businesses because their stock price fell. You know that every meaningful wealth-creation story in markets runs straight through periods that felt, in the middle of them, exactly like this one.
You know all of it. Yet, you may be feeling an odd sense of fear or uncertainty seeing your portfolio declining in value.
And just look at social media. It’s filled up with memes about losses, or voices explaining why the fall has much further to go. You find yourself reading things you know are not useful to read. The urge to do something starts to feel like wisdom rather than anxiety.
This is inert knowledge meeting real pressure. And it turns out the knowledge was not as solid as it felt when you were building it in calmer moments.
Isaac Newton understood markets. He had already made money in the South Sea Company by getting in early and getting out sensibly. Then he watched others keep profiting after he had sold and bought back in near the peak with a much larger sum. He lost the equivalent of millions. Afterwards he said he could calculate the motions of heavenly bodies, but not the madness of people. The madness he failed to calculate, though, was largely his own.
Smart people with good knowledge fail at this constantly. Because the knowledge was always inert. It worked fine in still water. The moment the current picked up, it turned out to have no real grip.
So what actually helps? A couple of small things.
Writing things down before the pressure arrives turns out to matter more than it sounds. There is something about a written commitment (“this is what I will do when markets fall,” or “this is what I will not do”) that the spoken or merely-thought version does not have. It is harder to argue with your own writing in the middle of a panic.
The other thing is to start noticing the gap in smaller, lower-stakes situations, like the sleep you keep delaying, or the habit you know you should build. Every time you catch the gap between knowing and doing in ordinary life and close it, even slightly, you are building the general capacity to act on what you actually believe.
Because that capacity, when markets are falling and everyone around you is either panicking or laughing at the panic, is worth more than any amount of additional knowledge you could acquire.
You probably already know enough. The question has always been the other one, which is whether you can act on what you already know, when it counts.
If you enjoyed this piece, you may also like The Long Game, a book I recently published featuring lessons from 30 investing practitioners on patience, survival, and building wealth over time. You can find it here.
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