"If I have even just a little sense, I will walk on the main road and my only fear will be of straying from it." Lau-tzu (604BC - 531BC)
In my view, philosophy begins with Lau-tzu...
For that reason, he will be the first to be highlighted in a new series of TFP posts, categorized as "Focus on Philosophy." I've been contemplating the creation of something that focuses more on philosophy and less on finance -- something that can provide for a refreshing divergence from the onslaught of attention-consuming information sources already covering "the news." Of course, you will still receive the weekly "Weekend Wisdom" and the consistent sprinkling of narrative financial philosophy, but considering the state of our world and, specifically, the global financial markets, I believe now is as good of a time as any to sharpen our focus on philosophy...
Lau-tzu or Laozi is a title, meaning "Old Master," given to Li Erg who was reportedly born around 600 B.C. and lived a long and good life as the royal court librarian and historian. Legend has it that Lau-tzu's access to the information found in the royal archives supplied valuable knowledge. When he "retired," he was asked to write down his thoughts, which became the foundation of Taoism. Tao, considered an influence on the teachings of Buddha and Confucius, can be translated as "the way," which implies both a methodical and a metaphorical path to enlightenment...
Lau-tzu is one of the most quoted philosophers here at TFP. Just the fact that his wisdom applies just as much today as it did 2500 years ago confirms that our human drive to know all "the answers" is flawed. If we would simply give up our desire to "know more" than others, we may discover that we already know "the way."
His wisdom speaks best for itself so here are a few of my favorite Lau-tzu quotes from the "Old Master:"
"There is no calamity greater than lavish desires. There is no greater guilt than discontent. And there is no greater disaster than greed."
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."
"He who knows, does not speak. He who speaks, does not know."
"At the center of your being you have the answer; You know who you are and you know what you want."
Personally, I use philosophy in all aspects of my life. With investing, it keeps me grounded to the core simplicity of asset allocation, diversification, and dollar-cost averaging as well as the logic of buying into weakness and selling into strength. Most importantly, it teaches me to be still in the midst of chaos. How you choose to use Lau-tzu's wisdom is up to you. Only you know "the way..."
TFPAuthor, Kent Thune, is the President and founder of Atlantic Capital Investments, LLC (ACI), a 'fee-only' Registered Investment Advisory firm located in Mt. Pleasant, SC.
Fascinating. I haven't read about this guy, so these quotes are very insightful.
With respect to the first quote, I am forming the impression that most philosophers have ascetic leanings, or at least are neutral about material gain and the pursuit of wealth; the driver of economic growth in the developed world.
It is late and I have much to learn and ponder, but I am led to wonder if there are any philosophers who outrightly promoted the virtues of the capitalist mode...or is this where we have the beginnings of the likes of the philosophies of Adam Smith? Just wondering if there were any promoters of this way of thinking and living when Greek philosophy was in its heyday?
Myself, I take the more ascetic route because I consider myself to weak and vulnerable to the vices and moral traps that are found in chasing the material, but perhaps if I was of stronger mind I could head down this route with a pure and strong mind and spirit.
Any thoughts would be much welcomed by this armchair thinker.
Posted by: Caravaggio | September 05, 2007 at 06:40 PM
Caravaggio:
Your thoughts may work well as a blog post in the future...
For now, I will say that most students of philosophy will agree that Capitalism emanated from individualism, which was made popular by the Greek (western) philosopher, Plato. Inidividualism is the view that individual rights and freedoms should form the basis of society. In contrast, Eastern philosophers, such as Lau-tzu, subscribed primarily to the view of Collectivism, which is the view that the stability of society is more important than individual rights and freedoms...
Thanks again for your thoughts...
Posted by: The Financial Philosopher | September 06, 2007 at 09:48 AM
"He who knows, does not speak. He who speaks, does not know".
does that mean all the informed blog writers actually do not know much :)
i am just kidding...maybe there is some hidden meaning in that quote.
Posted by: techy2468 | September 06, 2007 at 03:23 PM
Techy2468:
I know your tongue was slightly "in cheek" when making your comment but I believe Lau-tzu's words are similar to another of my favorite quotes from Shakespeare: "Have more than thou showest, speak less than thou knowest." In other words don't "show off" and don't be a "know it all!"
I believe you are mostly correct in your suggestion that blog writers actually do not know much. The vast majority of them should follow this wisdom from Sengstan: "Do not search for Truth. Just stop having opinions!"
Thanks for your comment...
Posted by: The Financial Philosopher | September 06, 2007 at 05:13 PM
Many thanks for the Fed paper reference on risk and uncertainty.
It is the first article I have printed off to read in well over a year. I took it into the garden and sat under the sun whilst absorbing the many messages it had to offer. Much of the content served as a welcome refresher, but there were some nuggets of information that were totally new to me, such as the total collapse (to zero) of the Chinese, Russian, Egyptian and Argentinian stockmarkets in the 20th century.
A point the article doesn't go in to, and one that might be interesting for investigation, is the idea that uncertainty is converted to risk as one's knowledge is increased, but that there comes a point when the economic cost of attaining additional knowledge is lower than the perceived benefit. Thus, we choose to accept a little uncertainty in our decision making, even though we could convert this to more agreeable 'risk' had we the resources.
Also, thanks for the education re individualism and Plato. It could make for a a good reference point from which I can begin an armchair study of philosophy...that said, there is plenty enough on this site to feed my appetite!
Posted by: Caravaggio | September 06, 2007 at 06:54 PM
Caravaggio:
You are truly a "financial philosopher!" Thanks for your thoughts...
Posted by: The Financial Philosopher | September 06, 2007 at 08:57 PM