A couple years ago I wa sin NYC and was invited to a talk on TM (Transcendental Meditation). Ray Dalio, probably its most noted practitioner was the featured speaker. It was a fascinating discussion and to be honest, I have never given it a single thought until that day. Now, I can’t say I am a practitioner now as having 4 very active kids under 14 leaves little “quiet time” to make a honest go of it but I can say I’ve become increasingly aware if the benefits of it. I will also say that I do try and set aside what time I can to relax my mind and on day I am able to do that, I do notice a difference, a positive one.
Because of that this book is going to be mandatory summer beach reading for me. I mean, what better place to read a book about meditation than on a beach listening to the waves? I think everyone should try to read this also. Think about it, if so many really successful people are doing something, shouldn’t one at least investigate it? Think about it. We will read books on people’s technical/fundamental investment process and try to mimic it. why, then, shouldn’t we investigate how they think and how they prepare their minds for the same thing? In a way it is now different that looking at an athlete’s training regimen without understanding how they mentally prepare themselves for games.
From the Yahoo article:
Dalio is featured in a new book called “Super Mind: How to Boost Performance and Live a Richer and Happier Life.”
Written by noted clinical psychiatrist and best-selling author Dr. Norman E. Rosenthal, M.D., “Super Mind” explores how the practice of Transcendental Meditation has helped business leaders achieve a super mind state of consciousness.
Our every day lives tend to be lived in three states of consciousness — wakefulness, sleep, and dreaming. However, through Transcendental Meditation there’s a “fourth state of consciousness” that “lies deep within the mind of every human being,” Rosenthal writes. That fourth state is “Transcendence.” Beyond this stage, though, lie even more states of consciousness, which Rosenthal refers to collectively as the “Super Mind.”
Rosenthal describes the “Super Mind” as “an experience of not only heightened aptitude and problem-solving ability, but also a state of emotional sensitivity, empathy, perspective and diplomatic skills.”
“It is the mind in peak condition not just momentarily – as we have all experienced – but with a consistency that may grow over time,” Rosenthal writes.
For the book, Rosenthal surveyed 600 practitioners of Transcendental Meditation. What he learned is that there are those who are “super-performers” in their respective fields and that’s not an accident.
“I now think that all high performers have in common, knowingly or unknowingly, qualities and characteristics of the Super Mind. That is, they are calm under pressure and uncannily resilient to stress. They take care of their health, set high standards of innovation and creativity, and are not only intensely engaged in their actions, but also capable of detaching when need be. They choose their projects carefully, keep the big picture in mind and ignore trifling details,” Rosenthal writes.
Moreover, Rosenthal is convinced that almost anyone can achieve this super mind state through the practice of Transcendental Meditation. Most practitioners of Transcendental Meditation do it for twenty minutes, twice a day. Rosenthal found that a habit of meditation affects the daily consciousness, unlocking this super mind state.
“It is not necessary, however, to be a super performer in order to develop your Super Mind. What matters is to reach your own potential, not some idealized standard.”
For more on Dalio and Bridgewater, here are Bridgewater’s Principles (pdf)
Later in the article:
]]>Dalio isn’t the only Wall Street professional mentioned in the book. Wealth managers Mark Axelowitz, a managing director at UBS private wealth management, and Ken Gunsberger, a senior vice president at UBS, are also practitioners of Transcendental Meditation.
There are many others not mentioned by name in the book who work in financial services. In fact, it’s not uncommon to come across a hedge fund with a meditation room.
Rosenthal asks Axelowitz if he thinks meditating can help people get rich. According to Axelowitz, who’s an actor and a philanthropist outside of the office, it helps in all areas of life, including investing.
“I think it will because I think TM helps in general, no matter what you want to do, whether it’s manage money, teach, be a doctor. If you think clearer in life, you’re going to make better decisions. When you’re stressed out and emotional, you’re not going to make the proper decisions,” Axelowitz says.
“In fact, one of the greatest money managers of all time, working in the 80s and 90s, was Peter Lynch from Fidelity. He had a saying: To master investing you need to master your emotions. You cannot get emotional in making investment decisions. And the same applies in life every day, with regard to all kinds of decisions: Should I cross the street right now? Should I run across the street because I’m late for an appointment? If you make an emotional decision because you’re late and you run across the street when the light is red, you can get killed. So I think TM helps you think and see clearer, and certainly with investments.”
“Davidson” submits:
]]>CALSTRS is a short term trader when its obligations are long term (see this article).’ Short-termism’ comes from how you define ‘risk’. ‘Short-termism’ is the problem. Since Harry Markowitz’s Modern Portfolio Theory in 1955, the world has defined ‘risk’ as short-term volatility and completely lost track of a long term view of asset growth and risk defined as a long term loss of capital. By falling into ‘Short-termism’, investment committees could respond to outside criticism by showing that they were making appropriate adjustments within a mathematical model that neither they nor the critics understood, but all could claim were using the best known methods at the time. They kept their jobs.
By having a long-term view as I do, as do many Value Investors, you see long-term fundamentals trending through a lot of market psychology pricing noise. There are only a relatively few Value Investors, but they see the capitalization valuation benchmark as roughly our GDP growth rate. I am the only one who has crafted a device like the SP500 Intrinsic Value Index ($SPY).
The reason why I am the first is simply a combination of serendipity, persistence and a strong sense of the value numbers convey( from my scientific background). The serendipity part of the equation rests on the development of the Internet which led the St Louis Fed to provide free public access to multiple government economic data series it had internally in 2005. The St Louis Fed has since expanded from a couple of thousand data series to something over 260,000 data series, a good number of historical discontinued series and many current global series. I had already created the SP500 price and eps history from 1926 manually typing into Excel from SP500 data taken from the S&P Blue Books I found in a research library in 2002. The US economic data which I discovered shortly after the St Louis Fed began to offer it was a gold mine as it let me conveniently mix and match to test what was consensus and then to find what I found were more relevant correlations. Knowing that the ‘numbers’ were derived from a ‘human system’ at the start, I never went the mathematical route in my analysis. I knew that the data values incorporated market psychology and that the only trends one could trust were ones which were mentally adjusted for the psychological impact. This meant trusting trends drawn by hand on semi-log charts and looking long term enough to wash out the impacts from market psychology.
Most today fail to see that drawing trends using arithmetic charts that they are measuring growth the wrong way. The charts below show how charting like this leads to incorrect conclusions. The chart on the left is arithmetic while that on the right is exponential(semi-log). The RED line is calculated beginning with a value of 10 and grows by adding another 10 units each period (y = mx + b data(m=10, b=10). On an arithmetic chart this produces a straight line, but on the exponential chart it produces a slowing curved line. This is so because adding the 1st ’10 units’ doubles the starting amount, but the 2nd ‘10 units’ is now added to 20 which is only 50% growth and the 3rd ’10 units’ added to 30 which is only 33% growth. Each additional ’10 unit’ addition represents slower growth on the base number which keeps rising as the additions remain the same. Plotting this type of falling growth sequence in an arithmetic chart produce a straight line. Only in an exponential chart does diminishing growth show up as the diminishing curve you see. Yet, most Technical Analysts use arithmetic charts draw their lines and call this ‘growth’. The DARK GRAY line is true growth of 20% per period and shows up as what many know as an exponential curve in the arithmetic plot and a straight line in the semi-log plot. Semi-log plots are the only way one can visually see growth and draw the trends in stock price data.
That is your math lesson for the day.
I am lucky to be able to have the perspective I do because of how events have played out for me. Once I finish my book, I hope to get the world to see markets very differently. We are a human system. Every day we strive to improve our condition and make a better world for our children. Every day we strive to make our system fairer. Yet, there remain many detractors who just do not understand how this all works and prefer to dictate against businesses as ‘evil’. Profit is the basis for GDP, for Money Supply, for improvements in our standard of living and poor politically motivated government decision making is responsible for inflation. If the CALSTERS people had a better view with which to guide their efforts their thinking would not be subject to ‘Short-termism’.
I am 90pgs along at the moment. I expect it to be ~250 pgs with many charts to explain concepts and dispel currently accepted myths. I expect once I have finished the 1st draft that it will take a couple of years of editing. I am thinking of beginning it with “I, Pencil” by Leonard Read which is a great piece about how we work together in very wide spread coordinated behavior to produce something as simple as a pencil with everyone involved making a profit.
