(2003) Schouborg, Gary. “Investing as Spiritual Discipline.”


Investing as Spiritual Discipline


Gary Schouborg


Marching off into the wilderness or entering a monastery in order to free ourselves from our obsessions has its limitations. Admittedly, withdrawing from our daily concerns simplifies our lives and eliminates many cares. It also enables us to feel within ourselves the difference between the peace of abiding in the present and the stress of grasping for future happiness. But it does so at a cost that may be unnecessarily high. In contrast, everyday life not only has its own legitimate satisfactions, but involves risks that may help us appreciate life even more deeply than we can by withdrawing into solitude.


One risk we might take in everyday, practical living is to invest some hard-earned cash in the stock market. If we can keep from swearing bitterly when we fail to buy a stock that quickly doubles in value, if we can keep from becoming greedy as a stock we own keeps rising, if we can keep from agonizing when it suddenly tanks, then we may well have liberated ourselves from our compulsions about money. Suppose, however, that we do swear bitterly, yearn greedily, and agonize over our stock trades. If we refrain from investing altogether, we can avoid that particular form of suffering. But if we learn how to manage our emotions while involved in the market, we may liberate ourselves even more deeply.


Being a slow learner, I have taken almost 20 years to discover how to base my investment decisions more on probabilities than on mere hope for gain and fear of loss. Of course, I "knew" from the start that's what I should do. But in my unawakened muddle, hope and fear were too often the deciding factors. Yes, I studied intensely and analyzed the situation thoroughly before buying or selling. But what really brought forth my final decision was fear and greed, not a calm estimate of probabilities. In short, instead of rationally responding to the market, I was governed by attachment. I was overly focused on what I might win or lose. If I was sufficiently hopeful or greedy, I bought or held. If I was sufficiently afraid, I sold or failed to buy. Instead of acting on probabilities inherent in market processes, I was compelled by my attachment to desired outcomes.


Some devotees of spirituality may object that the desire for gain that is inherent in investing is incompatible with spirituality. They may contend that seeking spiritual progress through the discipline of investing is self-defeating. I have two answers to their concern, one theoretical and the other experiential. The theoretical answer is that life involves gain and loss, and spirituality is about dealing with that fact with equanimity. I am not referring to a stoic equanimity that feels nothing, but to a wise and courageous equanimity that derives deep satisfaction from facing life as the constantly changing process that it really is. True, if we lived life as simply as clams, we'd be as happy as clams. But it is a mistake to identify spirituality with that option. The experiential answer is that it is possible to wrap ourselves in the security blanket of a simple lifestyle and suppose that we have liberated ourselves from clinging. But if we risk anything — whether money, life, liberty, or love — we are likely to discover depths of clinging that our simple lifestyle has only obscured, not resolved. Consider the following examples.


I recently purchased some shares of Sanfilippo & Sons (JBSS). It had sound fundamentals and technical characteristics, a promising stock. The very day after my purchase, JBSS was subpoenaed in a Federal investigation of its industry. The stock tanked 13% that day, even though there were no allegations of JBSS wrongdoing. It declined more than 30% in the next few weeks. My disappointment was all the more painful because I had considered buying Brightpoint (CELL) instead of JBSS. And while JBSS tanked, CELL shares tripled. To understand how investing can be a spiritual discipline, contrast unawakened and awakened responses to these two events.


Assume that I had $1,000 to invest. Begin with the simpler case of CELL, where I timidly failed to buy at the opportune moment only to see the price quickly triple. The unawakened might respond in several ways to this situation:


1)  denial = "I can't believe it!" (Repeated obsessively for several days, perhaps erupting occasionally in the ensuing weeks.)

2)  shock = I climb in bed, pull the covers over my head, and hope I'll feel better about it when I wake up.

3)  repression = I bury myself in busy work. (The more active personality's alternative to # 2.)

4)  regret = "Look at that %#@*& keep climbing!" (Repeated bitterly, as in # 1.)

5)  desperation = I chase after the stock impulsively, hoping that it will keep climbing.

6)  compensation = I buy almost any other stock, hoping to make up for (deny) the missed opportunity.


All six responses are variations of denial, of refusing to accept that I missed out on a golden opportunity. They are instances of clinging or attachment in which my decision primarily follows my hopes and fears. In contrast, the awakened investor accepts reality:


1)  I feel but accept the disappointment that naturally arises from missing out on a good thing.

2)  I turn my attention to the $1,000 I still have and I look to see what investment opportunities remain.

3)  I do not dwell excessively on the amount of money I might gain or lose. I focus instead on the probabilities inherent in each prospective stock, based on its fundamentals and technical characteristics. Of course, how much I'm likely to gain or lose is part of my risk-reward analysis, but I am clinging when my hopes and fears distract me from addressing the relevant investment issues on their merits.


The second case, where I eventually sold JBSS for a 15% loss, faces me with a more complex situation. Investors commonly react to such a situation with several forms of clinging:


1)  denial = "Why did I buy that?" (Repeated obsessively, looking in vain for a good answer that will take away the pain. In this particular instance, the question isn't a rational inquiry to identify mistakes I may have made in my original decision. I had good reasons to buy, but they didn't work out. Repeating the question here merely expresses the wish that I hadn't bought the stock.)

2)  self-punishment = "What a fool I am to have bought that stock!"

3)  shock = I climb in bed, pull the covers over my head, and hope I'll awaken to find that it was all just a bad dream.

4)  repression = I bury myself in busy work. (The more active personality's alternative to # 3.)

5)  obsession = I dwell obsessively on the $1,000 that I used to own.

6)  gambling = I refuse to sell until the stock gets back to my purchase price, thereby refusing to accept that I have really lost anything. I hope beyond hope that I'll get a big bounce back tomorrow. Or I fear that as soon as I sell, the stock will rebound.

7)  reaction formation = I impulsively sell the stock, distancing myself from the experience as quickly as possible.


All seven responses are variations of clinging, of refusing to accept my loss. In contrast, the awakened investor accepts reality:


1)  I feel but accept the disappointment that naturally arises from any loss, particularly one so unexpected and unfair.

2)  I turn my attention to the present. The fact that I used to have $1,000 is irretrievably history and irrelevant to my present decision. I now own a stock worth $850. What investment opportunities does this fresh situation present for me?

3)  I let go of any impulse to recoup my losses. Such an impulse is irrelevant. As the advaita teacher Poonja says, the enlightened individual is one without history. All that matters are the probabilities inherent in my present situation.

4)  I address my situation afresh. What are the opportunities for gain or loss by holding this stock? Do they suggest I hold or sell?

5)  Are there better opportunities elsewhere? Perhaps I should sell JBSS to pursue better opportunities.

6)  I study my original investment to see where I might have gone wrong, so I can make better decisions in the future. The focus here is on better understanding the market processes themselves, not on dwelling obsessively over past mistakes.

7)  In all these considerations, I do not dwell on what I might gain or lose. I focus instead on the probabilities inherent in the situation. That is, I don't decide based on the hope that I could double my money or the fear that I could lose everything. Instead, I decide based on the likelihood that the stock will resume its upward trend or break down further. Of course, how much I'm likely to gain or lose is part of my risk-reward analysis, but clinging operates when my decision primarily follows my desires, my hopes and fears.


Discerning within ourselves between an impulse to act on our hopes and fears and an impulse to address a situation on its merits is an investment challenge. It is a spiritual one as well. The Buddhist notion of impersonality is useful here. It teaches us to go beyond ego in the sense of seeing things as they are, unrelated to our concerns. Western philosophy of science makes a similar point in distinguishing between common sense as understanding things in relation to ourselves and science as understanding things in relation to one another. The more general spiritual or developmental issue is how to appreciate life independently of our individual concerns, how to appreciate The Process of which each of us is only a minor participant, as opposed to valuing all of reality only as it relates to ourselves. There are two options, pastoral and urban, for developing such appreciation. The pastoral option is to simplify our lives by reducing as much as possible everyday activities that strongly affect us. The urban option is to involve ourselves in contemporary everyday activities, but to emotionally relate to them more in their larger relationship to reality than just to ourselves.


It is a critical misunderstanding of spirituality to suppose that the pastoral option is somehow more spiritual than the urban. They are really just opposite ends of a continuum, differing only in degree. For spirituality is in large measure the inner peace we experience when we address any situation on its merits, since we are then acting in harmony with our environment. Faithful attention to our circumstances promotes creative and fulfilling participation in our world, the individual challenge being how large a world we can cope with in a deeply gratifying way. In the pastoral option we simplify our world, reducing it to a size that we can handle. In the urban option, we expand our world as we develop our ability to relate to it gratifyingly.


Investing is an urban option. It is not only compatible with spirituality, but it challenges us in ways that can promote our spiritual growth. What is incompatible with spirituality is clinging: insisting on what we want, letting our hopes and fears distort our perception of the market. Refusing to accept our situation, we falsify it, creating the stress that robs us of inner peace. Not only is clinging stressful, it is also unprofitable. Yet, although we know that is true, we continue to cling. There are two reasons why we do so: cognitive and emotional.


Cognitively, the monetary gain we hope for, or the loss we fear, is relatively simple. My loss of $150 on JBSS is something my mind can easily fix upon. On the other hand, probabilities are slippery. For one thing, they vary according to the time period. What is likely to be a profitable purchase if we plan to hold a stock for five years is different from what is likely to be profitable if we plan to hold it for five weeks. Furthermore, within each time frame there are limitless strategies we might choose depending on how much profit we seek and how much risk we're willing to take.


Emotionally, we tend to focus more on profit and loss than on probabilities because profit and loss have a more immediate and obvious impact on our lives. My loss of $150 on JBSS can be quite tangible. That $150 may have intense emotional meaning for me, because of personal goals that I have associated with it. I may think that losing it shows I have poor investment judgment, which threatens my hopes for early retirement. Or I may believe that the loss badly reflects on me personally, to the degree that my sense of worth is built on my success in achieving my goals. Probabilities, on the other hand, are less affecting because they aren't directly related to me. They have to do with the relationships inherent in the market itself independently of my wishes.


The investment challenge here is a specific instance of the more general, spiritual one: to move our attention beyond a self-interested concern for profit and loss to a more disinterested focus on things in relation to one another. How do we do that when we feel our self-interest so tangibly, compared to which a disinterested perspective seems so relatively pallid? Perhaps some investors can ignore the effect of profit and loss on themselves and, by pure force of will, concentrate dispassionately on probabilities. However, such individuals are rare. More importantly, living by force of will, even where successful, seems emotionally depleted and therefore an unlikely source of much happiness. It is much more feasible to learn how to enjoy the somatic process of working with probabilities, which reduces the pleasure gap between self-interested and disinterested activities. For anything we do, whether self-interested or disinterested, tangible or abstract, involves our body. And the exercise of our body is inherently satisfying if we awaken to our somatic process — our constantly changing inner experience.


I have argued elsewhere that soma, the state of awakening to somatic process, is the essence of enlightenment. Anything we do, whether self-interested or disinterested, involves a somatic process that is inherently satisfying if we but awaken to it. It is this somatic satisfaction inherent in anything we do that provides the pleasure of enlightenment. That pleasure is unconditioned because it is inherent in the abiding flow of our inner experience. All other human satisfactions are secondary in being specific moments within that flow. For example, the pleasures of sweets or good company, as well as the pains of illness or failure, come and go as moments within the abiding satisfaction derived from our openly greeting the constant flow of our inner experience. Far from finding inner peace in an eternity outside time, we discover it by fully immersing ourselves in time.


If we awaken to investing as a series of moments in our constant flow of inner experience, we experience its associated pleasures and pains as secondary to the abiding satisfaction that is inherent in the flow of inner experience itself. We therefore experience the pleasures and pains associated with profits and probabilities as secondary to the abiding satisfaction of being open to our investing experience. This perspective reduces the heightened value we would otherwise give to profits, making the contrast between profits and probabilities less emotionally stark, so that we can more easily train our attention on one or the other as appropriate. By challenging us to thus awaken to the abiding inner flow of our experience — to our somatic process — investment provides us with a discipline as rigorous as any that a pastoral spiritual strategy could hope for.