Thursday, November 13, 2008

The Zen of Investing

Stock Market Crisis OverImage by Wagner T. Cassimiro "Aranha" via Flickr

The word “bias” has a variety of connotations and denotations. The normal understanding is the connotation of prejudice. We have used this word in a different way to convey the meaning of predisposition which emanates from a decided point of view—having a closed mind. The source of a definitive stance is always in question. The source may be rumor, allegiance, indebtedness, a firm belief or ego-centric vested interests. Any of these may tilt bias one way or another. Someone who is unswerving can appear to be a tower of strength and trustworthy. But this characteristic can backfire when the source of their conviction slides away.

Our world has always been transient but the speed of transience today is rapidly increasing to the point that the issue of bias and predispositions is coming into question. The downside of this rapid change is the increase in a sense of instability which can go either way: Either to increase clinging or to release it. The upside is that it forces the issue of our premises and demands that we reconsider our bias. What may have worked in the past may no longer work and this can have the positive result of finding alternative solutions.

Adversity is normally thought of as something to avoid. But the fact is that adversity is a clear sign that change is needed. We don’t fix non-existent problems, only real ones and adversity tells us what to fix. It is like the warning light that switches on to tell us that we need to add oil before our engine locks up. And one area that almost always needs to be tuned is our biases, which when linked to the presumption of permanence can be disastrous. And in the opposite direction a presumption of total fluidity can keep us locked into fear and inaction. The ideal is to have the wisdom to know what can be changed and when to act. The rapidly changing ups and downs of the stock market demonstrates the result of greed and fear, the two-sided monster of attachment. My grandmother had a needlepoint sign which read, “God, grant me the serenity to accept the things I cannot change, courage to change the things I can and the wisdom to know the difference.”

Serenity, Courage and Wisdom: A tall order which demands a reexamination of bias. Being serene is the result of wise action taken in courage. It is questionable whether there is much serenity on Wall Street now days and the connection to unwise action is clearly evident. I doubt that my grandmother had Buddhism in mind when she made that sign but it is the best way to insure serenity because it strikes the moderate Middle Way between the extremes of biased presumptions—Not permanent and not completely fluid. Perhaps Wall Street needs a Zen of investing.
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