Investment Philosophy Part 2

Why you need an Investment Philosophy…A lesson from Uncle Jesse and Ayn Rand Part 2

This part of the speech you are about to read helped clarify my thinking and expanded my paradigms..

“You have no choice about the necessity to integrate your observations, your experiences, your knowledge into abstract ideas, i.e., into principles. Your only choice is whether these principles are true or false, whether they represent your conscious, rational conviction–or a grab-bag of notions snatched at random, whose sources, validity, context and consequences you do not know, notions which, more often than not, you would drop like a hot potato if you knew.

But the principles you accept (consciously or subconsciously) may clash with or contradict one another; they, too, have to be integrated. What integrates them? Philosophy. A philosophic system is an integrated view of existence. As a human being, you have no choice about the fact that you need a philosophy. Your only choice is whether you define your philosophy by a conscious, rational, disciplined process of thought and scrupulously logical deliberation–or let your subconscious accumulate a junk heap of unwarranted conclusions, false generalizations, undefined contradictions, undigested slogans, unidentified wishes, doubts and fears, thrown together by chance, but integrated by your subconscious into a kind of mongrel philosophy and fused into a single, solid weight: self-doubt, like a ball and chain in the place where your mind’s wings should have grown.

You might say, as many people do, that it is not easy always to act on abstract principles. No, it is not easy. But how much harder is it, to have to act on them without knowing what they are?

Your subconscious is like a computer–more complex a computer than men can build–and its main function is the integration of your ideas. Who programs it? Your conscious mind. If you default, if you don’t reach any firm convictions, your subconscious is programmed by chance–and you deliver yourself into the power of ideas you do not know you have accepted. But one way or the other, your computer gives you print-outs, daily and hourly, in the form of emotions–which are lightning-like estimates of the things around you, calculated according to your values. If you programmed your computer by conscious thinking, you know the nature of your values and emotions. If you didn’t, you don’t.

Many people, particularly today, claim that man cannot live by logic alone, that there’s the emotional element of his nature to consider, and that they rely on the guidance of their emotions. Well, so did the astronaut in my story. The joke is on him–and on them: man’s values and emotions are determined by his fundamental view of life. The ultimate programmer of his subconscious is philosophy–the science which, according to the emotionalists, is impotent to affect or penetrate the murky mysteries of their feelings.

The quality of a computer’s output is determined by the quality of its input. If your subconscious is programmed by chance, its output will have a corresponding character. You have probably heard the computer operators’ eloquent term “gigo”–which means: “Garbage in, garbage out.” The same formula applies to the relationship between a man’s thinking and his emotions.

A man who is run by emotions is like a man who is run by a computer whose print-outs he cannot read. He does not know whether its programming is true or false, right or wrong, whether it’s set to lead him to success or destruction, whether it serves his goals or those of some evil, unknowable power. He is blind on two fronts: blind to the world around him and to his own inner world, unable to grasp reality or his own motives, and he is in chronic terror of both. Emotions are not tools of cognition. The men who are not interested in philosophy need it most urgently: they are most helplessly in its power.

The men who are not interested in philosophy absorb its principles from the cultural atmosphere around them–from schools, colleges, books, magazines, newspapers, movies, television, etc. Who sets the tone of a culture? A small handful of men: the philosophers. Others follow their lead, either by conviction or by default. For some two hundred years, under the influence of Immanuel Kant, the dominant trend of philosophy has been directed to a single goal: the destruction of man’s mind, of his confidence in the power of reason. Today, we are seeing the climax of that trend.

When men abandon reason, they find not only that their emotions cannot guide them, but that they can experience no emotions save one: terror. The spread of drug addiction among young people brought up on today’s intellectual fashions, demonstrates the unbearable inner state of men who are deprived of their means of cognition and who seek escape from reality–from the terror of their impotence to deal with existence. Observe these young people’s dread of independence and their frantic desire to “belong,” to attach themselves to some group, clique or gang. Most of them have never heard of philosophy, but they sense that they need some fundamental answers to questions they dare not ask–and they hope that the tribe will tell them how to live. They are ready to be taken over by any witch doctor, guru, or dictator. One of the most dangerous things a man can do is to surrender his moral autonomy to others: like the astronaut in my story, he does not know whether they are human, even though they walk on two feet.

Now you may ask: If philosophy can be that evil, why should one study it? Particularly, why should one study the philosophical theories which are blatantly false, make no sense, and bear no relation to real life?

My answer is: In self-protection–and in defense of truth, justice, freedom, and any value you ever held or may ever hold.

Not all philosophies are evil, though too many of them are, particularly in modern history. On the other hand, at the root of every civilized achievement, such as science, technology, progress, freedom–at the root of every value we enjoy today, including the birth of this country–you will find the achievement of one man, who lived over two thousand years ago: Aristotle.

If you feel nothing but boredom when reading the virtually unintelligible theories of some philosophers, you have my deepest sympathy. But if you brush them aside, saying: “Why should I study that stuff when I know it’s nonsense?”–you are mistaken. It is nonsense, but you don’t know it–not so long as you go on accepting all their conclusions, all the vicious catch phrases generated by those philosophers. And not so long as you are unable to refute them.

That nonsense deals with the most crucial, the life-or-death issues of man’s existence. At the root of every significant philosophic theory, there is a legitimate issue–in the sense that there is an authentic need of man’s consciousness, which some theories struggle to clarify and others struggle to obfuscate, to corrupt, to prevent man from ever discovering. The battle of philosophers is a battle for man’s mind. If you do not understand their theories, you are vulnerable to the worst among them.

The best way to study philosophy is to approach it as one approaches a detective story: follow every trail, clue and implication, in order to discover who is a murderer and who is a hero. The criterion of detection is two questions: Why? and How? If a given tenet seems to be true–why? If another tenet seems to be false–why? and how is it being put over? You will not find all the answers immediately, but you will acquire an invaluable characteristic: the ability to think in terms of essentials.

Nothing is given to man automatically, neither knowledge, nor self-confidence, nor inner serenity, nor the right way to use his mind. Every value he needs or wants has to be discovered, learned and acquired–even the proper posture of his body. In this context, I want to say that I have always admired the posture of West Point graduates, a posture that projects man in proud, disciplined control of his body. Well, philosophical training gives man the proper intellectual posture–a proud, disciplined control of his mind.

In your own profession, in military science, you know the importance of keeping track of the enemy’s weapons, strategy and tactics–and of being prepared to counter them. The same is true in philosophy: you have to understand the enemy’s ideas and be prepared to refute them, you have to know his basic arguments and be able to blast them……

…..A battle of this kind requires special weapons. It has to be fought with a full understanding of your cause, a full confidence in yourself, and the fullest certainty of the moral rightness of both. Only philosophy can provide you with these weapons.

The assignment I gave myself for tonight is not to sell you on my philosophy, but on philosophy as such.”

Now in the context of your Investment Philosophy….Is it yours or just something someone put into your subconscious? Is your investment philosophy something that you thought about, researched, and created?  Or was it formed by the media, a school, or some guru? 

 

Stay tuned for the final part of this series…

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