Why A 2000-Year-Old Philosophy Is Still Being Used By Elite Investors Today

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One common investment catch phrase is: “You need to think differently, think independently, if you want to gain an advantage over other investors.”

And it’s true, but how do we apply it?

Warren Buffett gave us an insight when he advised, “Don’t fall in love with a stock. It won’t love you back.”

What Buffett was referring to is the fact that no matter how much you like a stock, no matter how excited you are about its upside potential, the stock price movement is outside of your control.

The stock price could drop 20% tomorrow, due a unrelated world event, or due to a market crash, dragging you down with it.

Very few investors can move a stock price. Carl Icahn sent out a tweet about Apple a few years ago, and as a result Apple’s market capitalization increased by about $8.4 billion.

But we individual investors don’t have this influence. Even Warren Buffett is reluctant to use his massive influence to move stocks, but both Icahn and Buffett started out with no influence, just like us.

Here’s the thing, we are better off not being able to, even if it was possible.

“The Chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control.”

– Epictetus

Some people are not naturally suited to investing. They know they cannot help but get emotionally carried along with the crowd or just don’t like the fact that luck plays a role in generating short-term returns.

Tim Ferriss, who is a four-tme New York Times bestselling author, has written about how he recognized that not being able to control the outcome of investment results is one of the reasons why he self-selected out of active investing on the share market.

That was a very rational decision on Ferris’ part.

But, if you are going to continue to play this share market game, what to do then?

Here is a clue:

“By controlling our perceptions, the Stoics tell us, we can find mental clarity. In directing our actions properly and justly, we’ll be effective. In utilizing and aligning our will, we will find the wisdom and perspective to deal with anything the world puts before us.”

– Ryan Holiday

Sitting on a mountain top with a bunch of Buddhist monks meditating and chanting is not going to help us if we are going to achieve a breakthrough new thought process to outsmart the crowd of investors.

Don’t get me wrong. I too meditate in the mornings, but not for the dubious reasons often present in the media or by meditating gurus (I do it for these reasons).

Ray Dalio (Trades, Portfolio), founder of Bridgewater Associates, the world’s largest hedge fund, attributes a large part of his success to meditation.

The more than 2000-year-old philosophy I’m referring to — that has been used by a number of U.S. presidents throughout history — is Stoicism.

Four-time New York Times bestselling author Ryan Holiday refers to it as, “A tool in the pursuit of self-mastery, perseverance, and wisdom: something one uses to live a great life, rather than some esoteric field of academic inquiry.”