Although the title of this post might be slightly provocative, this article is a more philosophical one. I was recently on the Amazon website when it recommended me to try their Audible app for free (for a month). In short, Audible allows you to listen to audiobooks. Very basic but as I do enjoy to listen to audiobooks especially when commuting, I decided to give it a try. As part of the trial you get to download two audiobooks of your choice for free – so, why not? The first book I listened to was “The Manual of Ideas: The Proven Framework for Finding the Best Value Investments” by John Mihaljevic (it lasts for over 11 hours) and the second one, which I just finished, is titled “The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life” by Mark Manson. That audiobook lasts for about 5 and a half hours and is pretty awesome from start to finish.

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behavioral finance theoryAs you’ve probably noticed by now, my readings mostly focus on investment and business related subjects, but once in a while I find great non-fiction books, which can actually be applied to several aspects of life… yes, that includes investment. It’s no secret that several highly successful investors such as Charlie Munger learn and apply their learnings in very different ways and we can all learn from this – see my previous post “Investors, illogical by nature?”. Munger is also a huge fan of psychology and hopefully this post will shed some light on why it’s so important to the investment process. “The Subtle Art of Not Giving a F*ck” offers great life advice, which you can easily implement and which you can also use to become a better investor. Most books of this type focus on positivity and how to do more, achieve more, be more – but this one is different and probably why I found it so enjoyable.

The basic idea behind Manson’s book is that we should stop caring so much about unimportant stuff and pay attention only to what’s important and meaningful in our life. He writes that at this stage of our society’s development (referring to developed countries), we have more than enough resources to be happy. Our issues are now existential and spiritual – not material. We get frustrated about the new schedule of a TV show, not owning the latest car model, not wearing a specific brand, etc., etc., etc. We have so much stuff and so many opportunities that we don’t know what to give a fuck about anymore. Mark Manson argues that the key to happiness is to care less, not more and that happiness is found in solving problems, not in avoiding them. There will always be problems, always. So deal with it because when one problem gets solved and you feel that everything is right, your brain will easily find a new problem somewhere.

One important aspect of the book is to choose your values (what you care about) very carefully. According to Manson, your values and what will bring you happiness have to be process oriented and not goal specific. For example, being right all the time or getting a rich top model girlfriend or boyfriend won’t help make you a happier person. Once you get it, then what?! However, focusing on cultivating a meaningful and fulfilling relationship for the long-term is much more likely to bring happiness to your life. Yes, it involves pain and work, but happiness is part of the whole thing. So what does this have to do with investment? Well, a lot actually. As an investor, if your only objective is money, you’ll have a pretty miserable career. Since he’s very young, Warren Buffett knows he’s going to be rich, but when he talks about it, it’s as if it was a detail – because it is. He’s always said, do whatever makes you happy as if money didn’t count and this is exactly what he’s doing. That also explains his modest lifestyle. He truly enjoys the process of investing. The returns he gets on his investments are not the end, it’s simply part of the process. Growth is what generates human happiness (keep growing your snowball! :P). It’s ingrained in our genetics. As a race, we just can’t settle.

Beyond choosing values worth fighting for, Manson also emphasizes that each person needs to know himself or herself well enough in order to choose the correct values. What is important for YOU? Not your neighbours. Manson gives a few good examples of famous people who went through similar situations but where one person went through hell and the other just swift through it. The difference is not the situation itself but how it was dealt with. What did the person give a fuck about (or not)? So, give a fuck about stuff that are in line with your personality and who you actually are and for that you first need to know yourself. This whole value system introduced by Mark Manson reminded me of the new book of acclaimed investor Ray Dalio, “Principles”. Even though I still need to read (or listen) to it, I’ve heard a lot about it and watched a few interviews with Dalio where he explains the concept of sticking to certain specific principles when going through life. Similar to Manson, Dalio mentions that it’s important for each person to develop a set of principles and not only to copy his. Again, the book “Principles” doesn’t focus on a certain objective, such as getting rich, it focuses on the whole journey of living a meaningful life. (Even though it gets a lot of attention because of the fact that its author is a billionaire.)

An interesting concept presented in “The Subtle Art of Not Giving a F*ck” is that we are basically wrong about everything. Just a little less wrong about certain things. We live in a complex world and things always evolve. Stuff we thought we knew 500 years ago, were proven totally wrong hundreds of years later. And this is true about almost everything. The lesson here is that to live happy, you need to stay flexible, open minded, and ask questions, a lot of questions. Never assume you’ve got the perfect answer. Quite similar to the underlying principles of value investing, isn’t it? Don’t be too convinced about your own ideas and don’t lock yourself into a certain box. Stuff like “this is who I am” or “I am like that, that’s it” won’t get you very far as you’ll stop progressing. Asking questions, even about yourself, should become a habit.

It’s unbelievable the amount of energy we spend on unimportant stuff. And not only do we lose time and energy, but we hurt ourselves in the process. Same when you analyse an investment, stop focusing on useless details and sensational news – get to the core. Manson ends the book talking about death. We all end up at the same place, but we don’t all have the same journey. Some make it more meaningful than others. For many, they realize this a bit too late. It’s proven that people who have survived near-death experiences usually come out of it stronger and much more enthusiastic about life. They know what to give a fuck about. Don’t wait till you get there.