I had an incredibly hard period in my college years facing exams. My mother sensing that I needed to get my anxiety levels down enrolled me in a month long meditation course. I stuck to it and my brain changed within a month, I was calmer and more focused and able to be objective about my exams.
I have consistently meditated since I was 20 years old and I believe it’s really helped me enjoy life and make the right decisions when under pressure.
When I decided to pursue investing full time I was surprised to find so many “great” investors turned out to be serious meditation fans.
Hollywood loves to portray all investors as ranting testosterone driven lunatics. Whether it's the “Wolf of Wall Street” or “Trading Places” there is a lot of yelling and flapping of arms to supposedly make money.
Yet, the people who consistently and quietly make the most money over long periods of time for their clients tend to be the very opposite -- calm, patient and very deliberate in their thinking.
So what’s the secret sauce for some of the world’s most famous investors?
Ray Dalio the founder of the of the world’s largest hedge fund (Bridgewater with $169 billion under management. Yes that’s billion with a “b”) attributes much of his success to his 40 plus year meditation practice. You can view a 2 minute video here if you don’t believe me: https://www.youtube.com/watch?v=zM-2hGA-k5E
Bill Gross arguably the world’s most famous bond expert regularly practices meditation as does Stuart Mitchell who runs a multi-billion dollar fund in London.
Examples of meditation helping investors improve their performance abound and there are now several meditation training courses and software to help investors.
So what is it about meditation that helps with investing? I think there are three main benefits:
1. Attention levels: Meditation increases the total period of attention you can give to a topic
2. Patience: Meditation increases your perspective by calming down your thoughts -- leading to a more patient view of the world
3. Mood regulation: Meditation helps regulate the ups and downs one might react to the market with, giving your rational brain the time to make more deliberate decisions.
The analogy that I like to use for meditation for your brain is combing your hair. In the morning your hair is a mess from sleeping. You comb it into place and it helps set you up for the day, ready for anything. In the evening you hair has been blown about by the wind and is messy again. Once again a few minutes of combing has everything going in the right direction.
Two easy ways to meditate:
1. There’s an app called Headspace you can download onto your phone. -
2. Youtube has a number of meditation channels. I usually type in “morning meditation hz” or “evening meditation hz” and try to find one that matches the length of time I have. Hz stands for hertz or soundwaves tacked onto meditations to make concentrating easier. It’s effective for me.
Have a great week!