“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.” Dune, by Frank Herbert
Fear—in its many forms—is our worst enemy. It’s true in life, and it’s true in investing. Natural selection has imbued us with an over-sensitivity to all things negative or dangerous. This aversion to loss has helped us survive, but it hurts us in many other ways. it lets fear reign. So what to do about it? A great place to start is to read Art & Fear: Observations on the Perils (and Rewards) of Artmaking by David Bayles, Ted Orland.
Art-making—which also comes in many forms—is one way to fight fear.
In large measure becoming an artist consists of learning to accept yourself, which makes your work personal, and in following your own voice, which makes your work distinctive.
The most important point in the book is that art-making won’t happen without persistence. In all my reading on creativity, genius, success, and happiness, persistence is sited again and again as the secret ingredient. In investing too, sticking to one’s investment strategy is the most important thing. You can have the best investing strategy in the world, but without persistence to match, you’ll never be a great investor.
talent is rarely distinguishable, over the long run, from perseverance and lots of hard work.
THOSE WHO WOULD MAKE ART might well begin by reflecting on the fate of those who preceded them: most who began, quit.
To see far is one thing: going there is another. — Brancusi
Throughout the book, I was constantly asking myself, is investing an art or a science? It seems to be a bit of both.
“The main thing to keep in mind,” as Douglas Hofstadter noted, “is that science is about classes of events, not particular instances.” Art is just the opposite. Art deals in any one particular rock, with its welcome vagaries, its peculiarities of shape, its unevenness, its noise. The truths of life as we experience them — and as art expresses them — include random and distracting influences as essential parts of their nature. Theoretical rocks are the province of science; particular rocks are the province of art.
There is room for both, I believe. The success of quantitative strategies suggests that there is a science to investing. The success of history’s best fundamental investors (Marks, Klarman, et al) suggests there is also some art. What do these two types of successful investors have in common? They are fearless. To beat the market, you’ll need to be very different. If you are very different, you’ll occasionally be very wrong. To endure periods of being wrong, you cannot fear.
Fears arise when you look back, and they arise when you look ahead.
When asked to list their top regrets, dying hospice patients gave this as their most common response: “I wish I'd had the courage to live a life true to myself, not the life others expected of me.” Being an artist is a way around this regret.
But while others’ reactions need not cause problems for the artist, they usually do. The problems arise when we confuse others’ priorities with our own. We carry real and imagined critics with us constantly — a veritable babble of voices, some remembered, some prophesied, and each eager to comment on all we do.
To thine own self, be true. Easy advice to give, very hard advice to follow. But living (and investing) according to your needs, your goals, your joys will certainly be better than worrying about what everyone else is doing or thinking. I think this book should have been called Art Kills Fear. Go read it.
You can receive suggestions like this one once per month if you sign up for the book club that I manage. I’ll send you 3-4 suggestions every month, culled from the 100 or so books I read per year.