January
2008
Why Every Investor Should Meditate: Enhancing Individual and Team Performance
In a previous edition of this newsletter, I outlined a framework for discussing high-performing teams. Within this framework a person can be in only one state of mind at a time: Either curious and open (“above the line”) or defensive and closed (“below the line”). The very best thinking — creative and insightful — takes place above the line. The thinking below the line is predictable and conventional. Obviously, in a game where independent thinking wins the day, you don’t want to spend a lot of time below the line.
Abraham Maslow, author of Maslow’s hierarchy of needs, describes the benefits of the meditative experience as being realized when:
The experiencer becomes more “innocent,” more receptive without questioning, as children are. … Fear disappears (along with all other personal or selfish considerations). The person is then non-defensive.1
This description almost perfectly defines the experience of being above the line: Curious, open, non-defensive, fearless, humble. Meditation promotes above the line thinking by teaching us to detach from our thinking, so that we are less pulled into the drama that our minds create.
Meditation Defined
We’ll borrow a working definition of meditation from Frances
Vaughn and Roger Walsh, two experts in the field of consciousness and
meditative practice:
The term refers to a family of practices that train attention in order to bring mental processes under greater voluntary control and to cultivate specific mental qualities such as awareness, insight, concentration, equanimity, and love. It aims for development of optimal states of consciousness and psychological well-being.2
For our purpose, the important aspect is the cultivation of a “witness” or “inner observer,” who watches thoughts and emotions as they emerge rather than becoming engaged with them.
Nearly all of us are addicted to thinking. We can’t slow down or shut off our mental machinery, which is why many meditation teachers refer to it as the “chattering monkey.” One of the goals of meditation is to detach from the chattering monkey, to realize that we can create space between us and our busy minds.
For example, if you are sitting meditating and an old argument arises in your mind, rather than playing it out in your mind you would simply note that this thought arose and let it go. As simple as this process sounds, if you try it you’ll see that it is remarkably difficult.
The Process of Detaching
Here is a description of the detaching process from another
expert in the field of consciousness, Eckhart Tolle:
The good news is that you can free yourself from your mind … Start listening to the voice in your head as often as you can. Pay particular attention to any repetitive thought patterns, those old audiotapes that have been playing in your head perhaps for many years.
This is what I mean by ‘watching the thinker,’ which is another way of saying: Listen to the voice in your head, be there as the witnessing presence.
When you listen to that voice, listen to it impartially. That is to say, do not judge. Do not judge or condemn what you hear, for doing so would mean that the same voice has come in again through the back door. You’ll soon realize: There is a voice, and I am listening to it, watching it. This I am realization, this sense of your own presence, is not a thought. It arises from beyond the mind.3
In a word: Curiosity. Observe the workings of your own mind with curiosity, as a scientist would observe a new phenomenon.
Key Benefits
It’s fair to ask, “So what? Why would anyone waste time doing
that?” For many years, the only answers were from meditators themselves,
who delivered testimonies about the various benefits. Now, however,
scientific studies of meditation show its benefits objectively.
Increased Heath, Happiness, and Creativity
Study of monks during their meditation practice shows that
meditation trains the mind to produce higher levels of gamma waves,
which “are associated with happiness, heightened awareness, and
coordinated thinking.”4
Bill Harris, at the Centerpointe Research Institute in Oregon, writes:
Several studies have shown distinct improvements in health: blood pressure normalizes, stress and anxiety levels decrease, insomnia disappears, and vitality increases. Mentally, the ability to focus the mind increases, as does the ability to think clearly and to make creative connections between seemingly divergent bits of information.5
The point about creativity is important. Almost every investment firm we work with emphasizes the need for thought leadership, independent thinking, and innovation. After all, you can’t beat the market if you are copying the market. You need to make separate and distinct bets, and they need to be right. Meditation contributes to thinking out of the box. That is the guts of creativity: Arranging the data in a unique way, different from the competition.
Detachment from Fear
Returning to Maslow:
Fear disappears (along with all other personal or selfish considerations). The person is then non-defensive.
All of this adds up to laying aside all the characteristics of our most prideful rationality, our words, our analysis, our ability to dissect, to classify, to define, to be logical. All of these processes are postponed.6
We can recognize when our monkey mind is not helping, like when it starts to scream, “The sky is falling, the sky is falling!” When this is the case we can turn to reliable “shift” moves that help us move back above the line and calm down. Meditation as a daily practice is the most powerful foundation for permanent equanimity.
Heightened Self-Awareness and Defense Against Bias
Another area of investing where a meditative attitude is very
helpful is in eliminating behavioral finance bias. Most experts say
self-awareness is the main tool for defending against this; we need to be
self-aware enough to watch what we are doing, note it, and eliminate it.
This process will not occur when people are running on automatic pilot.
Meditate the Easy Way
For many, the reaction to what I’ve written so far is, “Fine, but
I’m busy and I don’t have the time or inclination to go to an ashram in
India to learn the fine points of meditation.”
That’s why I’m excited to pass along some suggestions for streamlining the process. The resources described below are readily available and have been kitchen-tested by my firm. But try them yourself and judge from your own experience.
Centerpointe Research
Institute
Bill Harris’ Holosync product uses sound waves to affect the
brain. The beauty of this product is that you don’t have to DO anything;
just put on the headphones, and the sound technology does the rest.
Mind
Aerobics
Allen Koss has used the holosync technologies to create his own
CDs, which offer shorter listening times (30 minutes) and lower costs.
Learning Strategies
Corporation
Paul Scheele has developed paraliminal CDs that help create the
deep relaxation state achieved in meditation. I recommend “Deep
Relaxation.”
The Sedona
Method
Hale Dwoskin’s book and workshops teach a meditative process of
releasing thoughts and feelings for a greater peace of mind and access to
creativity.
“Practicing
the Power of Now” by Eckhart Tolle
Tolle writes compellingly on the subject of consciousness — an
excellent introduction.
1 Abraham Maslow, “Inner Knowing,” pg. 84
2 Roger Walsh and Frances Vaughn, from “Inner Knowing,” pg. 29.
3 Practicing The Power of Now, Eckhart Tolle, pg. 18-19
4 How Meditation Alters the Mind, “The Week,” 21 January 2005, pg. 21
5 Bill Harris, Centerpointe Research Institute, 1991, pg. 3
6 Abraham Maslow, “Inner Knowing,” pg. 84