On Becoming a Better Human and Impact Investor in 5779
Photo by Flavio Gasperini
A rabbi, a hedge fund manager and a sailor walk into a bar.
A few disclosures for full transparency: the rabbi was Yitz Greenberg, manifest via his book The Jewish Way; Ray Dalio played the part of hedge fund manager, also “present” via Kindle in Principles; the venue was less “bar” and more pizza joint; and the sailor was me, an American-born impact investor from Tel Aviv working my way through a dozen or so books I believed could offer wisdom on becoming a more successful human and investor in advance of the Jewish new year 5779, which began September 8th.
Definitions of “success” would of course diverge radically between hedge fund managers and Orthodox rabbis. And synthesizing these disparate views would be part of the fun. Like most impact investors, I enjoy the challenge of bridging different universes, most typically those of finance and social change.
“Success” for Dalio is straightforward. Be an exceptional investor, consistently delivering above-market returns for investors.
For Yitz, in a summary that will do him little justice, “success” is to help guide Jews toward what he views as our shared central purpose: slowly and tirelessly mold the world into its most perfect form. He defines this as a state where every living being, “made in the image of God”, enjoys three core dignities: being unique, being of infinite value, and being equal to all others. Yitz teaches that the fundamental Jewish task is to eradicate those factors — poverty, sickness, oppression, slavery, environmental degradation, etc. — that prevent many of our planet’s seven billion inhabitants from enjoying these dignities. This is a mission that resonates for impact investors.
So how to make sense of these distinct agendas? It turns out, I didn’t need to. Yitz and Dalio offered shockingly similar advice on the principles that make us both better humans and better investors, respectively. Here are four that I’ll be navigating toward during the year(s) ahead.
Radical Transparency
Yitz writes that the period of Elul, the thirty days before the Jewish new year, is a time when we are encouraged to take deep and critical stock of what is working and what is not as individuals, as couples, as families, and in all of our personal and professional relationships. We can only take action toward positive change by first forcing ourselves to break out of our routine and become truly conscious of the reality we’ve created or, often times, fallen into.
Dalio espouses a number of management practices designed to encourage radical honesty and transparency: an “issue log” where employees must write down any mistake they make so that others may learn from them; openly scoring employees on strengths and weaknesses so as to assign projects to those most likely to excel; and deliberate encouragement of “thoughtful disagreement” to allow as many ideas as possible to be put on the table.
Practicing radical honesty and transparency is hard. It is uncomfortable and time-consuming to have these conversations with others. It is challenging and vulnerable to acknowledge the many faults and weaknesses within ourselves. And it’s likely the most formative precursor to becoming better.
Evolve Constantly
Both Yitz and Dalio employ radical transparency — along with a healthy dose of metaphor from evolutionary biology — as a tool to stimulate continuous growth. Dalio writes that “radical open-mindedness and radical transparency are invaluable for rapid learning and effective change. Learning is the product of a continuous real-time feedback loop in which we make decisions, see their outcomes and improve our understanding of reality as a result (136).” Similarly, Yitz states that “those who confront their own guilt and failure in human and divine relationships — in the context of community oneness and divine forgiveness — can correct errors, develop new patterns, and renew life (187).”
Our challenge is to reject inertia, routine and stasis to deliberately and actively improve ourselves. Dalio spends pages placing his “principles” (his personal guidelines for success) within the greater context of evolution. “Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything,” he writes. “Evolving is life’s greatest accomplishment and its greatest reward.”
Yitz reminds us that much of Yom Kippur ritual (e.g. blast of a shofar, simulation of being on trial for another year of life) is designed to awaken us from the mundane and to stimulate a renewed commitment to improving ourselves and the world around us.
“Routine and stagnation are forms of death in life. People often stop growing long before they are recognized as dead. Such a “dead” person cannot be an agent of redemption. The tradition holds that the key to vital living is perpetual renewal of life; it seeks to attain that renewal by generating a continual process of examining life and constant rebirth. The awareness of being judged for life and death is a stimulus to stop living routinely (Yitz, 185).”
Listen Deeply
In the series of essays included in A Torah Giant: The Intellectual Legacy of Rabbi Dr. Irving (Yitz) Greenberg, one essayist notes Yitz’s incredible ability to be wholly present and deeply listening to every individual he encounters. I nodded my head vigorously when I read that description and I’m sure that others who have known Yitz, even only briefly as I have, would too.
How much of this quality is innately him and how much of it can be learned, I do not know. But the ability to deeply listen to each person in each moment with full consciousness of that person as a unique individual with a distinct and valuable perspective is uncommonly gracious and a surprisingly difficult practice. It requires pushing away our assumptions, stereotypes and preconceptions, tuning out the noise, and operating from a position of believing that the person before us holds a spark of the divine and something meaningful to teach us.
Yitz writes, “the goal of the human in God’s image is the fullness of life: to become more and more like God, who responds out of the infinity of life, not in a pre-programmed fashion without necessity or determinism but uniquely and appropriately to each person and situation. The normal processes of routinization and numbing are the enemies of this growth (200).”
As investors (or philanthropists choosing among grantees), much of our job is to rapidly determine how to assign limited attention and resources to the best ideas. Yet how frequently does this programmed approach result in my judging before I’ve fully listened? How often do I allow preconceived notions and the pressure of a schedule to limit my full attention and openness to new ideas, people, and investment opportunities? How often do I neglect to internalize and honor the fact that every single individual before me has experience form which I can learn?
Many of Dalio’s “principles” similarly focus on training the mind to increase open-mindedness and engage in structured deep listening, all for the purpose of superior decision-making. These principles entail: letting go of our desire to be “right”; actively seeking out as many opinions as possible, particularly those who disagree with us; sincerely believing that we do not know the best path or right answer; suspending judgement of others in order to fundamentally empathize and understand their point of view; and maintaining an awareness of and humility for the fact that we will never have perfect information. Not surprisingly, Dalio is a life-long practitioner of meditation and an active student of neuroscience and psychology’s approaches to expansion of consciousness.
Live with Death
Throughout Principles, Dalio frequently refers back to his “abyss”. In 1982, seven years after founding Bridgewater, he was loudly and publicly wrong about his bets on what he saw as a certain and imminent depression. As the economy slowly recovered, his bets turned against him and he lost all of his money, and had to lay off his team and effectively put the company to rest.
He writes, “in retrospect, my crash was one of the best things that ever happened to me because it gave me the humility I needed to balance my aggressiveness. I learned a great fear of being wrong that shifted my mind-set from thinking “I’m right” to asking myself “How do I know I’m right?” And I saw clearly that the best way to answer this question is by finding other independent thinkers who are on the same mission as me and who see things differently from me. By engaging them in thoughtful disagreement, I’d be able to understand their reasoning and have them stress-test mine. That way, we can all raise our probability of being right (35).”
Bridgewater’s early “death” left Dalio with an extreme and constant awareness of all that could be lost, training him to seek every strategy possible to mitigate the risk profile of his investments. This diligence — and the humility that powers it — enabled him to grow Bridgewater v2.0 into one of the world’s leading management firms with ~$160 billion under management.
Yitz explains that Yom Kippur serves to present Jews with their own death on an annual basis so that they may, on a regular interval, be reminded to embrace life with full dedication. Only by having our eyes wide open to all that is at stake, constantly recognizing the threat and ubiquity of death, can we properly regard life as the incredible and ephemeral gift that it is.
“Human beings cannot be mature until they encompass a sense of their own mortality. To recognize the brevity of human existence gives urgency and significance to the totality of life. To confront death without being overwhelmed, driven to evasions or dulling the senses is to be given life again as a daily gift. People generally experience this gift through a trauma: an accident or a critical illness or the death of someone close. Too often the encounter fades as the presence of death recedes and the round of normal life becomes routine reality. In the Jewish calendar, the Yamim Noraim (Days of Awe) structure the imaginative encounter with death in an annual experience in the hope that the experience will recur to liberate life continually (184).”
