Please indulge me for a book review not at all about investing.
One of the reasons, I think, Thoreau’s immortal quip, “The mass of men lead lives of quiet desperation” is so famous is because it’s so true. For reasons that don’t matter, I recently found myself in a few moments of such anger that I began to spiral—wallowing in a fury that discombobulates, grows upon itself, and erodes the foundations of meaning in the things we devote ourselves to, throwing the whole world out of whack.
What to do? I certainly don’t know, but here are some thoughts.
I start, each time, with my second favorite* quote ever: the great and wise Joseph Campbell, speaking of the struggle of the hero and his/her journey, summed it up like this: “The basic story of the adventure of the hero is, ‘Ok, so this thing has happened to you. Now what are you going to do with it?’”
What will you turn your disappointment into? And why will you do it? This, ultimately, is the question put to us all via basically all heroic myths through time and culture. For more, watch the still spectacular documentary Joseph Campbell and the Power of Myth, filmed at George Lucas’s Skywalker Ranch just months before Campbell ’s death.
Next, look directly to the modern myths themselves. Everyone has their own story that packs the most pop for their own lives. For all mine, even as an adult, the story of the Batman has been the highest and greatest modern myth. In 2009, Neil Gaiman and Andy Kubert collaborated on a series of comic books called Whatever Happened to the Caped Crusader? The idea was to write the “last” Batman story (as if there could be such a thing!). Though it is a comic, this is one of the most profound and deep works of fiction so far this century, without exception or qualification. Standing as an apparition over his own casket as those who knew him tell their stories about him, having just re-experienced the whole story of his life, Batman realizes this about his own life:
“…it doesn’t matter what the story is, some things never change. Because even when they aren’t talking about me, they are. The Batman doesn’t compromise. I keep this city safe, even if it’s just by one person. And I do not ever give in, or give up. Everything changes. Nothing stays the same. Every friend betrays me, sooner or later, and every enemy becomes a friend or lover. But that’s the one thing that doesn’t change: I don’t ever give up. I can’t give up.”
The meaning of a great myth is not to have us live up to such tremendous idealism, but to see that spirit as possible in us—to reach for it. If we devote just a bit of ourselves to this ethos: to our work, to our family and loved ones…it is impossible to go wrong. For Batman, and this is true in most great myths, the doing, the living, of the adventures is the meaning, not the goal or ending.
On that note, let us turn, briefly, to those great theorizers of the interior meaning of life: the Stoics, and specifically, Marcus Aurelius. In Meditations, and with great pith, Aurelius reveals:
Accept the things to which fate binds you, and love the people with whom fate brings you together, but do so with all your heart.
Here is the rule to remember in the future, When anything tempts you to be bitter: not, “This is a misfortune” but “To bear this worthily is good fortune.”
Spin? Maybe. But in the modern world, at least partially, meaning is self-made, self-determined. Meaning is there for the making. The stoics were among the first to reveal this.
Then, there is the great inscriptor of the American soul, Ralph Waldo Emerson. Each year, I endeavor to read all of his works (that’s right, all of them). But the heart of his work has always been the superlative essay, Self Reliance:
Men imagine that they communicate their virtue or vice only by overt action, and do not see that virtue or vice emit a breath every moment.
The force of character is cumulative.
Nothing can bring you peace but yourself. Nothing can bring you peace but the triumph of principles.
This is a nice summation: that the “force of character” is principles based, not always accomplishment-based, and that those principles are the ones to bring peace and meaning in the end.
It’s not without a tad of whimsy that lastly we meet the indefatigable David Lee Roth, +25 years exiled from Van Halen, only to find himself not just back in the band, but back on top of the music world. And in their newest song, Blood and Fire, even the clown prince of rock knows:
Lost victories long past,
Every time I bloom again
I thought it’d be the last.
And then something crazy happens…
I’m doing the victory dance.
Would that we’d always be so wise to take such a long view, even in rock and roll.
*My favorite quote ever is also Joseph Campbell’s: “We must be willing to give up the life we’d planned, so as to live the life that is waiting for us.”
A really fun, and quick election year read is Philip Freeman’s translation of Cicero : How to Win an Election. These are still, essentially, the rules they all still play by. Also, here’s a link to Freeman’s recent WSJ article on the book:
A fantastic and witty perspective on commodity speculation from the indefatigable Don Boudreaux:
A Tank Full Of Misunderstanding – Don Boudreaux, Cafe Hayek
The folks at MarketMinder.com have offered a great and pithy piece analyzing the latest in financial innovation:
What Does VIX^2 Equal? — By Fisher Investments Editorial Staff, 03/15/2012
Except the history of the VIX tells us it’s not a reliable buy (or sell) indicator. First, if you plot the VIX against volatile periods of the S&P 500, there can be a strong negative relationship—meaning low-VIX points did signal good times to buy and the reverse. However, the relationship is coincidental and relative. Meaning VIX peaks and troughs happen at different index levels, and you have no idea an inflection point happened until after the fact. Then, too, you’d have to know ahead of time you were entering a period of heightened volatility. Often, strong stock returns happen against a backdrop of a fairly low and stable VIX. So for all the times the VIX may work nicely (and you have a crystal ball and can know a peak or trough has formed), there are likely as many situations in which it doesn’t tell investors much that’s very useful.
Now, the VVIX will measure the market’s expectations of the market’s expectations of 30-day S&P 500 volatility. (And everyone knows you can’t triple stamp a double stamp!) So if you are watching the VVIX, what is it you’re trying to time the purchase of? The VIX itself? Keep in mind, the VIX doesn’t appreciate. It generally fluctuates around a mean (and the VVIX will, too). It’s not a buy-and-hold game. Volatility isn’t an asset class—it’s the description of the movement of an asset class. And the VVIX is, evidently, the square root of the description of the movement of an asset class.
Follow me on Twitter
Goodness knows technocrats are not among my favorite folks, but Mario Monti, Italy ’s current PM, has been an unlikely voice of reason lately—proclaiming a pro-growth policy featuring lower spending, lower taxes, and even easing of labor laws.
Wow! There’s hope for Italy yet.
If you haven’t heard of Intrade, read this article: It’s not always right, but over the last decade or so, Intrade has been a fascinating case study in the power of market wisdom. For those market watchers also keeping an eye on political outcomes, bookmark it.