| Health, Wealth, and Happiness |
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| "Those who keep learning will keep rising in life. The best thing a human being can do is to help another human being know more." - Charlie Munger |
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In today's issue: The Netflix documentary Stutz about the psychiatrist Phil Stutz, is an unexpected treasure trove for investors.
Over a career working with the rich and famous, Stutz has created a series of mental tools to help you overcome anxiety, confront your hidden fears, and unlock your potential.
In today's issue, Bitcoin Market Journal publisher John Hargrave unpacks some of the "mind hacks" from this unlikely guru and shows you how they apply to crypto investors. Read on. |
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| | | Must Read Today's most important story for crypto investors. |
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This new opinion piece by Charlie Munger is worth reading if only because he's one of the godfathers of value investing, the same philosophy we use here at Bitcoin Market Journal.
Just one big difference: we're staunch believers in crypto, while Mr. Munger is staunchly opposed.
We believe crypto investments can be analyzed in much the same way as traditional investments and worked into an overall portfolio of stocks, bonds, and crypto using the investing principles Munger has preached for much of his 99 years.
In this short op-ed, Munger argues that plenty of gamblers are drawn to crypto, which is true (the same could be said of many new financial technologies).
Look past the speculators and you'll see the underlying blockchain technology has massive potential to change the world. Further, we believe the next generation of valuable companies are being built now using this technology.
Investor takeaway: Munger has always been loudly opinionated, which is why we love him. On the subject of crypto, we'll have to agree to disagree. |
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Focus on the Process, Not the Results by John Hargrave |
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Watch the trailer here.
Last year, I saw a Netflix documentary I’ve been recommending to everyone. Itliterally changed my life. Stutz is a documentary by actor Jonah Hill about his psychotherapist Phil Stutz, who is kind of a legend in Southern California. Actors, money managers, and Fortune 500 CEOs all go to Stutz because he’s developed a system that works for people achieving the highest level of success. This system works for investors, too. The system, which Stutz calls “The Tools,” is a series of mental visualizations accompanied by a feeling. You practice these tools throughout the day whenever you need them. For example, one tool is called “Grateful Flow.” Whenever you feel worry or anxiety, you simply close your eyes, list three things you're grateful for, then hold your mind in the open “flow” of gratefulness (full instructions here). The documentary does a good job explaining these tools (along with hand-drawn illustrations from Stutz) to help you visualize everything: |
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Stutz suffers from Parkinson’s and other neurogenerative diseases, which gives the black-and-white documentary a kind of sweet pathos. This is not a Tony Robbins-style self-help guru barking at you about peak performance. This is a wounded healer. In fact, much of the documentary is about embracing the imperfect parts of ourselves (what Stutz calls “The Shadow”) that we don’t want the world to see. When Jonah Hill decides to embrace his own shadow in the film, it's a brave and memorable moment. You realize, "Well, he just did that, and he’s still alive. Maybe it’s okay for me to do that, too." For the past few months, I’ve fallen down the Phil Stutz rabbit hole. With his co-author Barry Michels, he’s authored two books called The Tools and Coming Alive. They’ve got a podcast. He’s been a guest on other podcasts, from Marc Maron to Goop. The New Yorker also did a feature story on him. Most importantly, I’ve done the exercises. Rigorously. Every day. I have my Fitbit set to buzz me whenever I’ve been sitting on my ass too long, and I use those random reminders to practice The Tools. They work, and they work specifically for investors. Here’s why. Overcoming Your Mind The biggest obstacles we have as investors are our own minds. No matter how rational you think you are, it’s hard to buy when the market is down and when everyone is moping about "crypto winter."
It’s just as hard to avoid buying when the market is up and when the price of bitcoin (or whatever) is soaring to new heights. It’s hard for me, too. This is the opposite of how great value investors work. They buy when stocks are “on sale” (i.e., when the market is down). If they sell, it’s when the stock is “overvalued” (i.e., when the market is up). The Tools can be used to rewire this self-defeating mental behavior by working with the emotions that drive us to make bad investing decisions. Emotions drive investor behavior, especially in crypto. As I’ve said a thousand times, just watch Google searches for the word “bitcoin.” They spike whenever bitcoin spikes. When the price goes up, everyone is suddenly interested. |
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Bitcoin price vs. Google Trends searches on “bitcoin price” The classic feelings are fear and greed. Look more closely, however, and there’s a tight knot of emotions under these two big boys. Chances are these emotions dictate many of the life decisions you make, not just the investing ones. Fear, for example, comes in many different flavors:
Fear of missing out Fear of looking foolish Fear of losing money/security Fear of losing status/standing Fear of the unknown
So many fears, but we can’t be afraid to work with these fears. |
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In another one of The Tools called Reversal of Desire, you visualize:
1) You and your Shadow plunging headlong into a black cloud of these fears (like charging into battle) shouting, “WE LOVE FEAR!”
2) Amid that chaos and discomfort, the two of you shout, “BRING IT ON!”
3) Eventually, the black cloud propels you forward into clear white light, serene and tranquil. You shout, “FEAR SETS US FREE!” You then sit for a moment, making a conscious effort to feel the bliss. These Tools must be practiced over and over again like a musician practicing scales or an athlete running drills. Once or twice doesn’t cut it. You have to train your mind like you’re in a marathon. As you get more proficient at practice, you get better at identifying the “cues.” These are the emotions, largely unconscious, that tell us it's time to practice. The more we practice these tools, the more we see when we need to practice them: when the feelings arise. These feelings can be the investor’s mortal enemy, but they can also become his/her best friend. Here’s how it’s happening for me. My Personal Story At a recent company meeting, we did a StrengthsFinder analysis for all our employees. My primary strength was an "Achiever." You can read all about me here, especially my "constant need for attainment."
Frankly, it’s exhausting.
This relentless ambition drives every minute of my waking day. I'm an overachieving workaholic that wants (no, needs) to leave his mark on the world. My greatest fear is that I die without fulfilling my full potential.
(My Shadow, the part of me I don’t want you to see, is the sad-sack guy who once got fired from a job. There he is, standing outside his former workplace, holding a box full of his stuff, wearing an overcoat that's one size too big.) Yesterday, I was walking through downtown Boston. Normally, my mind is restlessly comparing my achievements to everyone else’s. “That company just moved into that sweet office space. Why isn’t your company there yet?” It's not an obsession, just a low drone of dissatisfaction. Kind of like a mild toothache... Yesterday, I noticed something subtle and profound... The voice was quiet. It was an incredible relief. I couldn’t put my finger on why I felt so good, but I knew it was related to the inner work with the Tools. Later, with some time to reflect, I realized it’s not that the ambition or achievement are diminished; it’s that the self-critical voice learned to shut up. “I just love how these tools make me feel,” says Jonah Hill near the end of Stutz. “And I want to share them with the world.” I get it now. |
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Focus on the Process, Not the Results One of Phil Stutz’s big mantras is to “focus on the process, not the results.”
This viewpoint is not natural for us as our society is all about results. It’s about how much weight you lost, your fourth-quarter sales, your crypto net worth, etc. We want to see the bottom line, the final number... The results. But the process is how you get to the results.
Stutz uses the analogy of a "String of Pearls" (another tool) where every day, you get up and do the next right thing, then the next right thing, and the next. Each right action, each positive habit, is like stringing pearls onto a necklace.
The catch is that each pearl has a tiny turd inside. In other words, each action will feel imperfect. It will not feel natural. It will feel boring, pointless, or stupid. We want results now.
If you do the right things, like steady-drip investing, it will happen bit by bit, but excruciatingly slow. Days, months, years will go by. You will think to yourself many times, “Why am I doing this again?” If you keep doing the right things (again and again), there comes a day where you look back and it’s like the results just sprang into being. They snuck up on you. Reality changed when you weren’t looking. The crypto portfolio has suddenly become a comfortable nest egg that will let you retire early. Your body is suddenly in the best shape of your life, or you walk down the street and realize you have a newfound inner peace. Of course we care about the results. However, our primary focus is not on the results, but on whether we are committing fully to the process. Are we doing the right things every day? Are we stringing pearls onto the necklace? If so, great things will happen.
Stutz is available on Netflix here. Cheat sheet for The Tools available here. |
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Health, wealth, and happiness,
John Hargrave Publisher Bitcoin Market Journal |
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Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It's created by John Hargrave, Nick Marinoff, Steve Walters, Anatol Antonovici, Ben Burn, Preetam Kaushik, and Daniel Joel.
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