I loved spending the last two months at home. What made this time special was that I got to spend it with my whole family. In 2019 my son Jonah graduated from high school and went to Israel for a gap year. While in Israel he took classes at American Jewish University, did an internship at a fintech startup, and played tourist. After he had been with us all his life, Jonah’s leaving the house and going to a different country was really difficult for me. I was crushed. (I wrote about it here.) I missed having him at home.
His Israeli adventure was supposed to last till May. But in early March he grew concerned that Israel or the US would close its borders or airlines would stop flying and he wouldn’t be able to return in May, so he came home early.
We (my wife and daughters) are spending more time with Jonah now than when he was in high school. He is taking social distancing very seriously and thus not seeing his friends other than for a walk in the park. We are on the winning side of this equation – he is home almost all day. After not having him home for seven months, this is the best gift I have gotten all year. He is still finishing the semester he started in Israel, and so he is taking classes online at midnight – when it’s morning in Israel.
In fact, this coronavirus life is a bit surreal. Yesterday, on a weekday, all my kids were sitting in the backyard and studying: Hannah (14) was “in school,” with all her classes online; Mia Sarah (6) was doing Khan Academy on her iPad; and Jonah was writing an essay.
At the beginning of the coronavirus quarantine, I was Home Champion in Connect Four. Not anymore. Mia Sarah is beating me in this game half the time and she is beating her older sister and her mom all the time. Playing Connect Four brought Mia Sarah and me closer together – it’s something that is ours. She’ll sneak it into my office and say, “I’ll beat you.”
For those who read My Personal Manifesto (click here to have a copy emailed to you), here is a postscript update on Jonah’s CU Boulder adventure. Since Jonah was a little pup, I took him to CU Boulder football games (my partner Mike is CU alum and had season tickets for 45 years). Jonah’s dream was to go to CU Boulder. This dream was shattered last year when CU did not accept him. He was terribly upset for a few days. But instead of joining the CU “rowing team” or going to a different school, Jonah took the rejection as a challenge to overcome. He took a year off and was determined to apply again this year. I have never seen him be more determined to achieve anything. He got perfect grades at American Jewish University. He spent a month working on his entrance essay (I provided only very superficial feedback), and he applied again and was accepted to CU Boulder with an academic scholarship.
Not being accepted to CU Boulder the first time, though it was devastating, ended up being a great thing. He would not have had the opportunity to spend eight months in Israel, make new friends, learn to how to cook, and see and experience that wonderful country. Most importantly, he overcame an obstacle, all on his own.
Rebuilding Good Habits after Lockdown
Though I loved working from home, I now realize that it came at a cost – in March and April I destroyed most of the good habits I had worked very hard to build over the last few years. I stopped working out with my trainer for social distancing reasons, and thus stopped working out (I really need external pressure).
I have not written much in April. During the market-crazy volatility in March, I worked super-long hours and wanted to make sure I got enough sleep. I let myself get up at 7am instead of 4:30. Since I usually write early in the morning, that habit has been interrupted. I’ve been working proactively over the last two weeks to restore old good habits and create some new ones.
I dusted off my favorite book on habit building, Atomic Habits, by James Clear. Here are a few thoughts from this wonderful book.
There are three layers of thinking on changing habits:
First, the most superficial layer: setting goals or focusing on results. But if you look at successful and failed athletes, they had the same goals. Goals do not set us apart, our systems do. (By the way, the same applies to investing). In fact, goals often can be at odds with our long-term success and happiness. Once you accomplish a goal, then what? We should enjoy the journey more than the destination. Goals (destinations) do have value, as they set a direction.
This brings us to the second layer of thinking: systems, creating an environment and processes that help us achieve our goals. For me to start writing, I need to get up early. I go to sleep early. I stop drinking coffee at noon. I have an earlier, light dinner. I take a hot shower before I go to sleep. (I wrote a book review on Why We Sleep; read it here). I set my alarm clock for 4:30.
That is a system that gets me to write for two hours a day. I restarted my writing system two weeks ago. Waking at 4:30 was painfully difficult the first week. I had to force myself to wake up – that was the cost of having interrupted a system that worked. Last week it got easier. I wake up, splash water on my face, make coffee, put on my headphones, hit play on my Spotify playlist, and write until 6:30.
One trick I learned from James Clear is stacking one good habit on top of another. After I finish writing I go for a three-mile walk in the park for an hour. I love these walks; I listen to books, music, and podcasts.
One of my favorite quotes from James Clear is, “You do not rise to the level of your goals. You fall to the level of your systems.”
And finally, we have the third layer of thinking on changing habits: our identity. Your identity is your self-image, your worldview.
Clear writes, “The more you repeat a behavior, the more you reinforce the identity associated with that behavior. In fact, the word identity was originally derived from the Latin words essentitas, which means being, and identidem, which means repeatedly. Your identity is literally your “repeated beingness.”
I am the person who writes. I am a healthy person. I am the person… you fill in the blank. Eating cheeseburgers and washing them down with milkshakes is contrary to the identity of a healthy person. So, lunch at Sonic Drive-In is out if I want to be healthy (sorry, Sonic lovers).
I may have written about this before, but this story is worth repeating. I have a good friend – an orthodox rabbi. He was at my house and he told me that he had gained a lot of weight. He said, “I eat too much bread.” I told him that he needed to change his identity to that of a person who doesn’t eat bread. He was puzzled. I said, “Well, how much energy does it take you not to eat pork?” He said, “None. I don’t eat pork.” Do the same with bread, I said. He did. He called me a few months later, thanking me for the weight he had lost.
Here is another example. You offer a cigarette to two people who used to smoke. One says, “Thank you. I am trying to quit smoking.” The other says, “Thank you. I don’t smoke.” Who do you think is going to continue not smoking, the one whose identity is that he is trying to quit? Or the one who doesn’t smoke?
Another way to look at these three layers of thinking: systems are what you do, outcomes are what you get, and identity is what you believe in. The beauty of this three-layered framework is that you can completely rewire your identity (your perception of who you are) by setting goals, designing a system that is easy to follow and that works for you, and then faking it until you make it. Yes, you may be faking it. If you are 350 pounds and can barely walk up a flight of stairs, you’re faking if you’re telling yourself that you’re a healthy person. However, once you embody the behavior of a healthy person and start losing weight, it will be easier to convince yourself that you’re healthy once you get to 280, then to 250 and 200, and you’re moving with ease.
When writing was a habit, I did not have to force myself to write. Writing was part of my identity. I was the person who got up every morning and wrote. After not writing for a month, I realize that without it my brain is complete chaos. Just like working out is exercise for my body (I feel mushy when I skip workouts), writing is exercise for my brain. It is not a something I do in addition to investing. No, it’s a necessity for me; it’s how I keep my brain tuned and how I connect and organize my otherwise chaotic thoughts.
I guess now is a good time to come out of the closet and admit to myself that I am a writer. It is one of my identities. I always thought being a writer would chip away at my being an investor. Now I don’t see them as mutually exclusive, but complementary. Now that I am thinking about it, when I started thinking of myself as a student of life, I became more open-minded about the world around me.
I now realize that we need to treasure and protect our good habits and not take them for granted. Though I did not appreciate it at the time, it is clear to me now that going to the office provided structure. When I stopped going to the office, I should have mindfully created a new structure that helped me maintain my habits or at least replace one good habit with another. For instance, even though I stopped working out with the trainer, I could have walked in the park and done push-ups, sit-ups, and squats instead.
It is time to treasure and rebuild old (good) habits and forge new ones. I am looking forward to it. I wish the same for you.
Q&A with Students
I love doing Q&A-style lectures on investing at universities. I feel like I can have a (hopefully positive) impact on the students’ still-mendable minds. They don’t want free fish (a stock tip), they want to learn how to fish. I’ve done these types of lectures for years at Denver University and the University of Colorado at Denver (my alma mater, where I also taught in the early 2000s).
To be honest, the talks are a somewhat selfish endeavor. I really enjoy doing them, and every single time I learn something new. Since campuses are closed, I embraced our new digital times and did a Q&A lecture with students via Zoom on April 22nd – you can watch it here. We opened it to students from all over the world (as you’ll see, it was a very international crowd).
We’ll be doing these a few times a year in the future. They’ll be open to students only (but I’ll share the video with all my readers). If you are a student, sign up here and you will be notified about the next Q&A lecture. If you are a professor, please feel free to forward this to your students. I enjoyed this Zoom call so much that I decided to come up with a (free) practical curriculum for students who want to learn about value investing from a practitioner.
I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).
In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”
I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).
And if you prefer listening, audio versions of my articles are published weekly at investor.fm.