Recently, I listened to a podcast featuring Andy Puddicombe, who founded the wildly successful meditation app called Headspace. He told his remarkable story of going from a Buddhist monk to circus performer, before founding Headspace and achieving global success.
In his teens, he endured tough times. His parents divorced. Then, he witnessed friends being killed by a drunk driver. And later, his stepsister died.
At university in the UK, it led him to question everything and suddenly quit his course to pursue meditation in Asia. He first went to India, then other countries, practicing the strict discipline of Burmese meditation. It often involved getting up at 2.30am each day, practicing meditation for 18 hours a day, with three hours of sleep. He did that for 10 years and was ordained a Buddhist monk.
Following this, he went back to the UK and pursed a degree in circus studies! After a decade of long bouts of silence and meditation, he needed to express himself physically via the circus. It was the yin to meditation’s yang.
While doing this, he gave a lot of thought about how to take all he’d learned about meditation and bring it to a Western audience.
He was teaching meditation to individuals and groups in London, when he met a student, who was a burned out advertising employee. Together, they formed the idea for Headspace.
For those who are unfamiliar with meditation, it’s akin to sport – there are lots of different ways to do it. Many people have tried to bring the practices of meditation from Asia to the West, with varying degrees of success. Puddicombe’s Headspace changed all that: it took off like a rocket ship.
The question is: how did he do it? Here’s my theory, and it comes from personal experience. I’ve been an intermittent meditator for several years, struggling to find a style that suits me. Recently, I discovered Headspace and it’s transformed my practice. The app eased me into so-called mindfulness meditation and made what is often a religious and esoteric experience into a secular, easy-to-understand one.
There’s a certain genius to Headspace and I think it comes from two things. First, it feels authentic. Puddicombe comes across as a guy who genuinely thinks meditation can benefit everyone and he wants to be an enabler for that to happen. And he does it without bastardising the ancient traditions of meditation. Second, Headspace converts complex meditative practices and philosophies into simple, digestible morsels. Puddicombe makes it easy for the average person to understand and practice meditation.
How Headspace relates to investing
It struck me that these qualities of authenticity and simplicity apply not only to building a business app but to many aspects of the investment world.
A few months ago, a friend asked me where he could go to read and learn more about investing. Of course, I pointed first to Firstlinks. I then relayed other sources but quickly realized that getting sound investment advice isn’t easy.
If I had my time again, I would tell my friend to read broadly, and go with those thinkers and practitioners who are authentic and keep things simple.
Why? Because authenticity means they’re being true to themselves, their profession and their audience. Simplicity means that they understand the topics well and can explain it in a way that any layperson can grasp. Simplicity is a skill that only a real expert can obtain.
Think about the greatest investor and thinker of the last century: Warren Buffett. People admire Buffett because he’s authentic. He comes from mid-West America and despite his immense wealth, he’s never forgotten his roots. Buffett has also been able to communicate complex financial theories with simple, folksy stories that everyone can understand. As Puddicombe has democratised meditation, Buffett has democratised the stock market.
The same qualities were evident in Buffett’s offsider, Charlie Munger, who died earlier this year. People liked him because he was authentic. He was blunt and could be offensive at times, but people respected that he was feisty and spoke his mind.
Munger also had the gift of simplifying the complex. Phrases of his such as “invert, always invert’ a problem come to mind.
Other writers who I admire display similar attributes. Vitaliy Katsenelson immigrated to the US as a Russian Jew as an 18-year-old. Learning a new language and fitting into a new country can’t have been easy. He not only did that but quickly rose to head a small investment firm. Katsenelson has been writing about investing for 20 years, and both his blogs and books have proven popular. The reason? He comes across as a real and humble person. Not only that, he’s also able explain investing concepts through beautiful stories and analogies that most people can relate to. There’s a certain genius to Katsenelson that reminds me of Andy Puddicombe.
Here in Australia, I admire Peter Thornhill, who’s written several articles for Firstlinks. I don’t agree with everything he says but most of it makes sense. Thornhill attracts an audience because people can see that he believes what he says, and he has a track record of implementing what he speaks of. That’s authentic.
Plus, he explains the share market in understandable terms. And his investment strategy reflects that simple approach.
Detecting bad investment advice
If authenticity and simplicity are features of sound investment writing and advice, then inauthenticity and complexity are the flipside of that.
Being inauthentic broadly means not being yourself. This happens all the time in investing. Being inauthentic can mean making up stories to suit an audience, distorting personal backgrounds to suit a topic, or trying to imitate more famous industry people.
Those who favour complexity over simplicity are doing it for a few reasons. It might be that they don’t understand a topic well enough to be able to explain it in a simple way. Or it could be that they use complexity to hide something.
I’ll give a specific example of an investment writer who I wouldn’t recommend to my friend mentioned above. And he’s a famous and wealthy writer too. His name is Morgan Housel and many of you would have read him or heard of him. He’s sold millions of books by making investment accessible to the masses. He’s done that by making things simple to understand.
A little too simple, in my view. In doing so, he crosses over into being as much a marketer as an investment expert. And it lacks authenticity, in my view.
Housel often offers ‘hacks’ or ‘mindsets’ to get wealthy that cater more to those who are already wealthy or others who are ‘self-help’ junkies. His advice offers less at a practical level to the average investor.
This may be a little harsh on Housel, and there are a lot worse proponents of investment advice out there.
Beyond investment writing and advice
The qualities which made Andy Puddicombe successful not only apply to investment writing but many other things in finance - to seeking formal financial advice, investment funds, and investment products. Look for authenticity and simplicity, and your investment journey is likely to be a more successful one.
James Gruber is editor of Firstlinks and Morningstar.