Study Stoicism to Improve Your Investing and Your Life


Objective judgement, now at this very moment,
Unselfish action, now at this very moment,
Willing acceptance, now at this very moment, of all external events.
That is all you need.

To me that captures the three disciplines (perception, action, will) very nicely. It tells you how to see the world, how to act in the world, and how to come to terms with the world. It is indeed all one needs. You could spend a lifetime trying to just live that quote.

Understanding Stoic Philosophy may help you as an investor maintain rationality, control unwanted emotional reactions, and develop clear thinking for better choices which is, after all, what investing is all about.

The essense of philosophy is that we should live so that our happiness depends on as little as possible on external causes. –Epictetus

  1. stoic-week-2016-handbook-stoicism-today
  2. philosophical-meditation
  3. the-stoic-philosophy-murruoft
  4. the-stoics-1975

Stoicism in six minutes

11 responses to “Study Stoicism to Improve Your Investing and Your Life

  1. I hope some readers sign up for Stoic Week. Stretch yourself!

  2. “Unselfish action, now at this very moment”

    “Action” as a concept arises from living things being selfish.

  3. ‘Stoicism Today: Selected Writings Vol. II’ Available for Free During Stoic Week.

  4. How do you define selfish? Is being selfish a good trait to have? Why or why not. If no one was selfish, would society collapse? Does being selfish HELP others? Looking forward to Daniel’s thoughts.

    • “How do you define selfish?”

      To be selfish is to be concerned with one’s own interests.

      “Is being selfish a good trait to have?”

      Good for whom and for what?

      “If no one was selfish, would society collapse?”

      Based on my definition, yes. Look at the Soviet Union.

      “Does being selfish HELP others?”

      Yes, such as an entrepreneur providing value through providing goods and services. Although, helping others there is a secondary consequence, not the primary purpose.

  5. Following from the last question, should helping others be your primary concern in life?

  6. One can’t help others unless you are able to thus the instructions to put on the oxygen mask on first before helping your child.

    I think if you are constantly working on yourself to improve your rationality in a world of non-coerced beneficial exchange, then you will be helping others in society. Also, helping someone you don’t know across the street may give you pleasure, so what looks like a SELFLESS act is really quite selfish. Helping others is actually hardwired into us. See how many people do NOT try to help a child who is wandering onto the RR tracks with a train scheduled to arrive. Or a child left abandoned in the street. Human nature.

    Helping others could be the most selfish act for yourself if that is what you enjoy doing. It is all subjective like intrinsic value.

    All intrinsic value calculations and exchanges are subjective.

    • I agree with most of what you said. Helping others, within certain contexts, can be in a person’s best interest.

      “Helping others could be the most selfish act for yourself if that is what you enjoy doing. ”

      Just because you enjoy something does not necessarily mean that it is in your best interest. Consider binge-eating junk food or taking brain-destroying drugs. Not that I’m comparing helping other people to those things.

      “It is all subjective like intrinsic value.”

      I think it is important to clarify what is meant by “subjective”. Surely, you don’t mean that you can act any arbitrary way and it will automatically be in your best interest just because you chose to do it. Now, if by “subjective” you simply mean that choices and actions are made by subjects, then that’s pretty uncontroversial.

  7. See or The Art of the Swap (The Office).

    Please make exchanges because they value the particular objects differently, however more people may agree based on the actions of others that certain objects/services are worth more in money terms than other objects.

    Value and price are quite different in Austrians’ definitions.
    Value: Subjective and ordinal.
    Price: Objective and cardinal.

    Ordinal means that one can compare and list the priority of things, but can’t measure its size. Cardinal is a more strong property which not only ordinal but also measurable.

    In a world of objective value, transactions can’t happen. Because if something could be judged objectively to be undervalued, everyone would be buyer and there wouldn’t be any seller in the market. On the other hand, if something could be judged objectively to be overvalued, everyone would be seller and there wouldn’t be any buyer in the market.
    [–]its4thecatlol 3 points 2 years ago*

    The word intrinsic value has somewhat different meanings depending on the context. Austrian economics isn’t just a school of economic thinking, the antipositivist roots push the field closer to philosophy than mainstream economics. The STV answers the most basic question: What is something worth? Marxists will tell you it’s about the labor involved in that something’s extraction/production/etc. Marxism thus attaches a certain moral value, even romanticism, to work. The STV says that the price of something is either independent of any moral value, or is the moral value (this has been pejoratively labelled market fundamentalism).

    Outside of the armchair philosophy world, intrinsic value refers to the hypothetical price of a financial security before taking market sentiment into account. The prices of stocks fluctuates based on more factors than just the health of the underlying companies (eg. liquidity concerns from major shareholders, overconfidence, underconfidence, mistakes). Over the long run, Graham posits that the influence of these secondary factors will be overshadowed by the intrinsic value (operating cash flow and asset value) of the company.

    Value investors try to estimate this hypothetical price and then make decisions based on that. If stock ABC ever goes below its IV, then you should buy it. If it goes above its IV, you should sell it. No one intrinsic value exists, but a reversion to the mean is seen in all financial price data — just like with all random things.

    Graham’s philosophy ignores the philosophical reasons for prices. One could evaluate Graham’s philosophy empirically, and then give a definitive judgment on its predictive power. The very nature of Austrian economics makes its proving or disproving technically impossible.

    Read more here:

    Yes, people paid too much for houses in 2007 with their subjective actions and it did not benefit them. The paid too much over intrinsic value.

    Thses are very abstract concepts but important.

  8. Definition of Intrinsic Value:
    1. The DCF of ALL cash flows discounted back at a proper (for you) discount rate.

    2. The price paid in cash between a sentient seller and buyer–or Private market value.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.