A flippant, fearless, and fundamental countdown of big money investing.

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#44 Mindfulness

The Om of Wall Street

Ask today’s Masters of the Universe, and they’ll likely tell you their ample assets derive less from brute determination than from something more like ‘mindfulness’—the key to investment success, many now claim, is meditation. Press further, and you’ll get used to some common refrains: “More restorative than the deepest of deep sleeps!” “Meditation makes you think clean.” “With meditation, I see something most people don’t see.” “Just like taking a hot shower, it relaxes you.”

To the uninitiated, raving accounts of this mass quest for introspection can be a little bewildering, like listening to a guy explain his passion for CrossFit or his transformation through bacon and butter while going ‘paleo.’ No one argues that there’s anything wrong with these things—hot showers are rightly popular, and much better to be mindful than mindless—but perhaps the enthusiasm is just a little bit of a stretch. (Wasn’t it just a few years ago that everyone was pouring all this effort into triathlons?)

Spend a few days researching an article about it, however—with inverse proportions of cortisol to sleep—and you might start to wonder if these guys are in fact as smart as their Forbes profiles suggest.

Though the list of practitioners can fill an asset-management Rolodex, the applications of meditation are not confined to the finance world. The practice draws an extensive community of celebrity practitioners, whose endorsements may carry varying degrees of weight: Jerry Seinfeld, Hugh Jackman, Cameron Diaz, and Oprah Winfrey all credit meditation with their personal and professional growth.

But probably the most prominent apostle of meditation is Bridgewater Associates Founder and Co-CIO Ray Dalio, who is also by many metrics the world’s most successful asset manager. Dalio, 66, is worth more than $15 billion, and has been meditating for more than four decades after he was inspired by the Beatles. He attributes the creativity that he’s developed from the practice with informing many of his company’s unusual principles—the ones he maintains distinguish Bridgewater and drive its extraordinary performance.

“We’ve invented risk parity, and separated alpha from beta, and all of it came from a certain creativity that I do believe was given to me from meditation,” says Dalio. “It gives me equanimity and creativity. The ideas bubble up from the subconscious. It gives me a better way of looking at things.”

As Dalio ascended, his peers took note of his affinity for meditation; many decided he was onto something, and introduced the practice to their own circles. If some reasons for starting were either social or competitive—perhaps the opposite of motivations traditionally associated with the pursuit—many say it helped them not just relax, but also make better investment decisions.

“It gives me equanimity and creativity. The ideas bubble up from the subconscious. It gives me a better way of looking at things.”These days, joining the meditation bandwagon gets you terrific company. At the helm is the David Lynch Foundation, a prominent nonprofit evangelizer of meditation that draws from a broad range of influential support. This May, for example, the foundation had a fundraiser panel on Manhattan’s east side with Dalio and his friends Larry Summers and Paul Volcker, moderated by Charlie Rose. The event, tables for which went for $25,000 to $50,000, was sold out—proceeds went to Operation Warrior Wellness, which teaches veterans with PTSD and their families to meditate. The theme of the conversation was “navigating volatility” (in this case, that meant markets). For the past four summers the foundation has shifted its outreach efforts a little further east, hosting community meditation seminars out of a house in Bridgehampton, New York, donated by one of its supporters.

Beyond the exciting peerage it fosters, perhaps the biggest reason meditation is touted in the finance industry is its ability to diminish stress. Bob Roth, executive director of the David Lynch Foundation—and meditation teacher to everyone from curious Manhattanites to Oprah—puts it this way: “There’s no medicine we can take to prevent us from getting stressed and there’s no magic pill to get rid of it when we feel that way. People may think, ‘I’m fine; I’m not that stressed,’ or ‘I handle it.’ But then you ask them, ‘Do you sleep well? Are you as productive as you could be, as focused? Do you bounce back from a pressured situation? How’s your family life?’ Modern medicine has no antidote for the amount of stress we face today and it eats away at us. We may mask it with several glasses of wine at night or cups of coffee in the morning. Maybe an Ambien or a Klonopin. But that doesn’t fix it.”

If that doesn’t get your attention, consider yourself lucky.

To get the full retinue of benefits, teachers like Roth say you need to spend 20 minutes twice a day—most days—meditating. There are different styles, but the Dalios of the world choose transcendental meditation, or TM. (This is the kind that the Beatles did with their guru in India back in 1968, and the kind that inspired Dalio’s practice.) Transcendental meditation uses a mantra—a secret meaningless phrase given to the meditator during training and repeated over and over again—as a catalyst for settling the mind.

Eager to supplement their enthusiasm with science, champions of meditation point to the increasing number of peer-reviewed studies about the medical virtues of meditation. Dalio talks fluently about meditation’s ability to manipulate amygdalae and cortexes—parts of the brain tied to panic and impulsive, emotional decision-making—while other investors note that their blood pressure has gone down, or that they’re simply now able to sleep.
  

Meditation’s traction in finance today is a far cry from the days of Liar’s Poker—you wouldn’t have caught Michael Douglas sitting in a quiet room muttering his mantra—but its proponents remind us the pairing is not as counterintuitive as it may seem. Sure Siddhartha meditated, but so did samurais. And kamikaze fighters.

“The roots of meditation are the ancient warrior professions,” Roth explains. “That was hand-to-hand combat, and to perform, you couldn’t act out of anger or fear or impulsivity. You had to be clear-thinking at all times. When he talks about how meditation improves his performance, Ray talks about inner equanimity and being a ninja. It’s made to order for people in the finance industry.”

Investors who have already joined the meditation craze claim it’s gained such rapid traction in the financial sector for several reasons. It’s flexible—one of the advantages of meditation is that it can be done anywhere. “You can do it in a car; you can do it on the subway,” says Roth. “People do it on the train going home to Connecticut or New Jersey. I did it in Yankee Stadium when the Yankees were getting clobbered.” One asset manager told me he pops a few avenues over to St. Patrick’s Cathedral to meditate in the afternoons (“I give a donation and just sit there—and I’m not even Catholic”).

Perfect for anyone who has ever had a volatile reaction one later regrets, meditation’s stress-reducing properties help curb impulsive or emotional decision-making. Through meditating, “you can look down at oneself operating in whatever challenges one has,” says Dalio. “Rather than being in it, emotionally in it, one is kind of above it, and can think logically about what’s happening. That creativity is very helpful.”

Roth says that the practice is also attractive to investors because it welcomes extreme skepticism. Be as cautiously optimistic as you want, and he promises favorable return on investment.

“With meditation, it’s like saying I’m skeptical about gravity, or about what happens when I turn on a flashlight,” he says. “It’s not based on belief. It just works.”

Of course, it’s a little more difficult to find the people meditation hasn’t worked for—the investors who took big hits while meditating are conspicuously quieter than Dalio and his friends.

But that’s why we have selection bias.

Dr. Norman Rosenthal, one of the leading medical experts on transcendental meditation, notes that benefits can vary. “Some people get the amazing benefits the first time they meditate,” he says. “But don’t go into it thinking you will get the benefits the first time. They’re like compound interest—they keep growing.”

The meditation craze has grown enormously in the finance industry over the last year. This is partly due to the support of investment firms themselves, many of which offer meditation classes as part of their company benefits and furnish their employees with meditation rooms. Dalio helps subsidize lessons for his employees at Bridgewater—and close to half of the staff has dived in.

Roth notes there can be a direness to a firm’s embrace of the practice, recalling a recent conversation he had with a bank about helping it integrate meditation into its benefits program. “I asked them, ‘Why now?’” he recalls. “And they said, ‘Too many suicides.’”
  

As to whether it can really lead to improved success in investing, the answer is complicated. But its proponents argue it can be an important tool.

In May, Dr. Rosenthal published a book called Super Mind, which devotes a considerable amount of research to this topic. (Its cover beckons: “How to boost performance and live a richer and happier life through transcendental meditation.”) In addition to extensive interviews with Dalio and other finance leaders, the book quotes TS Eliot and Vladimir Nabokov.

Rosenthal, an enthusiastic meditator himself (“eat what you cook,” he offers), explains how in the course of his research he found that meditation had helped financial professionals improve their careers—as they emulated their successful peers.

“I saw a video of a man in the wealth-management area who said he was not really having his best year, so he wondered what he could do that would improve his performance,” he recalls. “He looked around and wondered who had been hitting it out of the ballpark lately, and found that Mark Axelowitz had been. He asked what he’d been doing and Mark said TM. He heard a talk by Ray Dalio, and since he started he’d been having his best career. And so he began to do it, and his decisions improved, and his wealth increased.”

Dr. Rosenthal insists that the connection is causative. “It’s no coincidence—it’s absolutely predictable,” he says. “When your mind settles down and you’re able to get rid of all the extraneous thoughts, that’s when your mind is strongest.”

Axelowitz, a philanthropist and board member of the David Lynch Foundation, says that he learned about meditation from Dalio.

“Ray and I had similar backgrounds—we grew up on Long Island; we cut lawns; we were golf caddies, average students,” he says. “And four years ago I looked at Ray and thought, ‘He’s really successful, while I’m just…’” He trails off as we look down at the lobster we were consuming at Mark’s dining club with a view of the Manhattan skyline, which was mostly below us. “I was intrigued that such a successful guy was meditating,” he continues. “So I tried it. And it was a game changer.”

Just as he’d picked up the practice from Dalio, Axelowitz spreads the word as well.

“When I have friends and colleagues to my home out in the Hamptons, I encourage them to meditate,” he says. “People enjoy it.”

He says the practice fits seamlessly into his life.

“I work out three days a week and I use a trainer for that because I don’t like it,” he says. “But I can’t wait to meditate. It’s like a 20-minute vacation twice every day. For me it’s my golf—and it takes less time.”

“Meditation is the interface between finance and the softer issues around performance and competition. It fuses those elements.”Investors frame meditation as part of what can seem like an almost institutionalized quest for self-improvement. Ken Akoundi, who runs an industry newsletter called Investor DNA, says that he began meditating out of a quest to challenge himself.

“I think for me before there was a laziness—like I can get by; people like me; I’m fine,” he says. “Meditation for me was a proactive component of wondering how I could be a better person.” He feels that the restorative elements of the practice help him compete with his peers, both professionally and socially.

“I feel like by the end of the day someone has taken my brain and put it through a shredder,” he says. “Meditation has helped restore balance. For me it’s the interface between finance and the softer issues around performance and competition. It fuses those elements.”
  

No one doubts Dalio’s authenticity when it comes to meditation or any other facet of his life—and his peers give compelling accounts of how meditation helps them, too (financial gains aside, mindfulness makes everyone look so healthy).

But what about the associate who complements the navy duffle with prestigious piping in one hand with a paperback of Too Big to Fail in the other? If he swaps out Andrew Ross Sorkin for Dr. Rosenthal’s Super Mind, is he really any closer to equanimity? Or do the returns diminish as we get further from Dalio, probably the closest contender to a philosopher king of the financial universe we have?

Interestingly, most of the younger bankers I asked about the meditation craze rolled their eyes and said their officemates would laugh if they announced they were meditating—better to take the Jameson out of the drawer after the rush from Seamless sushi had worn off instead. It’s their bosses—the 40-and-over set—who, some combination of wiser and older, seem to be ready for mantras that don’t involve the word ‘epic.’

In his book, Dr. Rosenthal writes that through transcendental meditation the mind “keeps growing beyond our individual concerns, thereby providing a channel for greater connection between and among individuals, their fellow human beings, and the universe as a whole.”

So, more meditating, less Sherman McCoy. If Wall Street’s decided to use meditating to channel a greater connection among individuals, their fellow human beings, and the universe as whole—that really does sound transcendent.

Lindsay Crouse

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