Lent and Investing

During Lent we practice various disciplines. Traditionally, the guidelines given were/are what are called the Three Pillars of Lent: Prayer, Fasting, Alms-giving. The Three Pillars of Lent require discipline. 

Investing requires discipline. You know that, right? But discipline has slipped from its previous historical perch.

Historical perch?

Well, sure. If you think about it, doesn't the idea that folks were more disciplined "back in the old days" rise from the ashes of history and make some sort of sense?

OK. Let's accept what should be a pretty clear fact. Moving on.

During Lent, if we're taking this Season of Penance seriously, we commit to some Lenten plan. That plan, if developed according to tradition, would be based on those Three Pillars of Prayer, Penance, Almsgiving. 

Now, what about investing? Doesn't that call for some pretty serious degree of discipline? 

Look at it this way. Without any sort of discipline, we're subject to our emotions. And, in fact, emotions are typically what many, if not most people base their investment decisions on. 

Of what should this discipline consist? At the very very least, it should begin with a buy and sell discipline, with the emphasis on the latter. What causes you to buy something? If how you feel is the answer, you're off track. If there's some sort of metrics or analytical process, you're warmer. 

More important though, is sell discipline. We read a study a while back that demonstrated that even so-called "genius" hedge fund managers lacked a clear sell discipline. One theory was that the genius came up with the buy thesis, and simply didn't like to admit it might have been flawed. 

That's rather ego-centered, don't you think? Even if the initial analysis was perfect, things change. We need to change with changing circumstances. And we need to be sure our egos don't get in the way. It's not about us.

Lenten discipline can slip into the ego camp as well. 

Let's say we've developed a solid discipline. We will reduce our intake of food and drink to some degree. We will eschew certain food or drink that particularly floats our boat. As kids, we would give up various treats like chocolate or chips. Whatever. 

We're also determined to make more time for prayer and good spiritual reading. It takes discipline to carve out time when we lead a busy life at work and with our domestic obligations.

Finally, we're committed to charity - both giving alms to the needy, as well as charity in our words and behavior to loved ones, even co-workers. With loved ones, we temper our typical impatience or unkind words. At work, no indulgence in gossip; maybe even an active effort to assist others as they deal with difficult tasks or projects. Something like that.

But we want to be sure ego doesn't ruin all this. And to the extent we succeed in our commitment, ego stands up and wants to take all the credit. That builds up our ego, to be sure; but does it build up our spiritual life? Are we doing all this because we love God, or because we love ourselves?

So discipline needs to keep ego or self at bay. We're not here to become mighty heroes in the eyes of others. 

In the case of investing, we're here to assure our good stewardship of the resource God has given us. In the case of Lenten discipline, we're here to show Our Lord, Jesus Christ, our love for Him who gave His life for us on the Cross.

So there it is. Lent and investing woven together as we strive to keep our cool in the face of what many have called the most puzzling markets of their lifetimes; and keep our eyes on God and off ourselves as we keep our commitment to prayer, fasting, and alms-giving during Lent.