Investing for the long run requires some degree of courage, especially when growth gets tested, but there is good courage and there is bad courage. Its only when the courage is applied to doing the right thing, that it becomes a virtue. Otherwise, it’s just folly. Having courage to fly a plane into the world trade center is not something to cherish or respect, for example, and neither is the courage to double up on investment mistakes. I came across a passage in a book titled A Small Treatise on the Great Virtues: The Uses of Philosophy in Everyday Life (2002) that made this point well. In explaining the virtue of courage, Andre Comte-Sponville reminds us that “one can courageously face an illusory danger or shrink in cowardice before a real one.” “Fear is both a necessary and a sufficient element in courage,” he continues, “and it doesn’t matter whether fear is justified or illegitimate, reasonable, or unreasonable. Don Quixote shows courage in tilting at windmills, whereas science, for all the reassurance it offers, has never made anyone courageous.”

Comte-Sponville goes on to claim that real courage exists only in the present, and that courage is at its greatest when hope vanishes. “When there is nothing more to hope for, when there is nothing more to fear, then, against all hope, courage is at hand to face the present fight, the present suffering, the present action.” This is why “according to true military discipline one must never reduce his enemy to the point of despair; for such necessity multiplies his strength and increases his courage. We have everything to fear from those who fear nothing. For what should they fear if they have nothing more to hope for? Soldiers know this and guard against it; so do diplomats and statesmen.”

I found Comte-Sponville’s treatise on courage to be fascinating because of how well it applies to investing, even if not necessarily to virtue.