Investing for Survival

The Master-Word

 BY ENIS

My favorite book is The Life of Sir William Osler by Harvey Cushing (William Osler’s pupil).  William Osler was an expert doctor, one of the founding doctors of Johns Hopkins Medical School, and a mountain of a man.  The book is a 2 volume tome, but the nuggets of advice that Osler provides in his various speeches and writings are gems.  His thoughts were often directed at medical students and fellow doctors.  But his command of language is supreme, and the messages more widely applicable.  One of my favorites:

Though a little one, the master-word looms large in meaning. It is the open sesame to every portal, the great equalizer in the world, the true philosopher’s stone, which transmutes all the base metal of humanity into gold. The stupid man among you it will make bright, the bright man brilliant, and the, brilliant student steady. With the magic word in your heart all things are possible, and without it all study is vanity and vexation. The miracles of life are with it; the blind see by touch, the deaf hear with eyes, the dumb speak with fingers. To the youth it brings hope, to the middle-aged confidence, to the aged repose. True balm of hurt minds, in its presence the heart of the sorrowful is lightened and consoled…

And the master-word is Work, a little one, as I have said, but fraught with momentous consequences if you can but write it on the tablets of your hearts and bind it upon your foreheads. But there is a serious difficulty in getting you to understand the paramount importance of the work-habit as part of your organization. You are not far from the Tom Sawyer stage with its philosophy “that work consists of whatever a body is obliged to do, and that play consists of whatever a body is not obliged to do.”
A great many hard things may be said of the work-habit. For most of us it means a hard battle; the few take to it naturally; the many prefer idleness and never learn to love labor.

I actually present this diatribe as a counterexample.  In most professions, hard work is the key, underlying driver of success.  Roll up your sleeves, get to work, and watch the fruits of your labor materialize over time.  The curious aspect of financial markets is that hard work matters, but managing emotions matters much, much more.  Preparation through study and hard work matters.  Yet, I would argue that discipline over one’s emotions and patience to wait for the favorable opportunities are more important.

In other words, the master-word is Discipline, fraught with momentous consequences if you can but write it on the tablets of your hearts and bind it upon your foreheads.  Emotions often cause us to throw discipline to the wayside, especially when the crowds are whispering in their ear, day after day, week after week.  Sometimes it’s better to just wait and watch.  I struggle daily to be disciplined and wait for my setup, rather than getting involved simply because prices are moving and I’m hearing chatter and excitement from all sides.

This market is getting very emotional.  Each day seems to bring with it more blacktop banter – gloating, name-calling, laughing and crying.  There is no rule that you always have to act, though, whether that means getting in or getting out.  But whatever your strategy, don’t forget the master-word.  Not Work, but Discipline.