ZEN INVESTOR BEGINNER INVESTOR

MEGAN FRASER

Business Development & Marketing

February 2023

Spending some time recently in silent retreat provided the opportunity to intentionally polish and reset my lenses. The ‘Stoep Zen’ retreat is located just outside Colesburg in the Karoo; it is very remote and you are likely to find enlightenment before you find phone signal. (Needless to say, I found neither.)

Without the sedation of distraction, social media in particular, I became more aware than ever of our addiction to activity. For the most part, we are conditioned to believe that ‘doing something’, anything, is preferable to ‘doing nothing’. And so it is that we’ve come to expect that any solution, any panacea, is the result of frenetic activity – and very often expect that the louder/brighter/busier the activity, the more effective the panacea will be. Nothing relieves and impresses the breathy, mascara-smeared heroine more than the hulky hero who boisterously bounces in creating much sound and fury.

But is this in fact the most constructive approach to resolution? As I’ve strayed and stumbled my way through this journey called life, one of my greatest teachers has been the philosopher, Alan Watts. Through his teachings he introduces and expounds on the philosophical system of Taoism and the teachings of Lao-Tzu who is the Chinese philosopher credited with the founding of Taoism.

Wu Wei is a concept central to Taoism, and a core theme of Lao Tzu’s Tao Te Ching, translated literally as ‘non-doing.’ Bringing this concept into a contemporary setting by using the GPT bot offers a succinct and clear explanation: “In Zen Buddhism, the concept of “non-doing” refers to a state of being in which one is free from the distractions and attachments of the world and can live in the present moment with clarity and awareness. It is a state of being that is often referred to as ‘effortless action’.

While ‘non-doing’ may seem like it implies passivity, it is actually quite the opposite. In Zen, ‘non-doing’ is not a state of inactivity or laziness, but a state of heightened awareness and action that is performed effortlessly and without attachment to the outcome. It is a way of being in which one acts from a place of inner stillness and wisdom, rather than from a place of tension, anxiety, or desire.

In this sense, ‘non-doing’ is a state of dynamic activity that is characterized by a lack of resistance, judgment, or struggle. It is a state of being in which one is able to respond to life with clarity and ease, rather than being driven by the force of habit or the limitations of the ego.”

This explanation perfectly illustrates the philosophy and implementation of the Gryphon multi asset funds. Using historical data-based indicators to determine the asset allocation of the funds, the greatest challenge is to treat the indicators as sacrosanct, to honour our philosophy. Thus Abri du Plessis, one of the portfolio managers on the funds, will modestly declare that all he has to do is sit on his hands and do nothing. (He will also tell you that sitting on your hands can keep you from fiddling where you shouldn’t fiddle.) But doing nothing is still doing…the challenge is non-doing…the ‘action of no action.’

The book, Zen Mind Beginner Mind, bares the challenges of this model of rinse and repeat; it is not without its own trials. Most of us can relate to the stultifying effect of holding the same space longer than we’d like to:

“But we may find it not so interesting to cook the same thing over and over again every day. It is rather tedious, you may say. If you lose the spirit of repetition it will become quite difficult, but it will not be difficult if you are full of strength and vitality. Anyway, we cannot keep still; we have to do something. So if you do something, you should be very observant, and careful, and alert.” *

Our application of this philosophy is summed up by this comment from one of our team: we are at the auction every day, reviewing the options, comfortable that our indicators will signal any compelling option besides cash that will deliver the optimal risk-adjusted return for our investors.

“If your mind is empty, it is always ready for anything, it is open to everything. In the beginner’s mind there are many possibilities, but in the expert’s mind there are few.”* Every day, we approach the market with a beginner’s mind.

We are comfortable with our action of non-doing – we trust that our decision to move out of equities at the end of August 2018 and remain so was the appropriate one. Our adherence to our philosophy has not always resulted in a comfortable ride for our investors – holding cash with the purpose of protecting capital is great when markets pull back as they have, but FOMO comes calling when equities head off into the stratosphere…as they have. Rules-based investing requires trust in your philosophy and a great deal of patience – this is what we believe makes our multi asset the ideal component in structuring a diversified portfolio.

“The most important point in our practice is to have right or perfect effort. Right effort directed in the right direction is necessary. If your effort is headed in the wrong direction, especially if you are not aware of this, it is deluded effort. Our effort in our practice should be directed from achievement to non-achievement.” *

The challenge for any fund manager is to find the balance between confidence and arrogance – to find the space where you can plant both feet and stand firm regardless of the winds of chaos and fear…and implement the non-doing as required.

“When you make some special effort to achieve something, some excessive quality, some extra element is involved in it. You should get rid of excessive things. If your practice is good, without being aware of it you will become proud of your practice. That pride is extra. What you do is good, but something more is added to it. So you should get rid of that something which is extra. This point is very, very important, but usually we are not subtle enough to realize it, and we go in the wrong direction.”*

While action figures like Spiderman, Superman and Batman remain favourites among children, maybe it’s time for a new set of heroes – men of non-doing – perhaps we’ll see a new range of figurines available on-line shortly, namely HH Dalai Lama, Lao Tzu and the Gryphon investment team wearing shiny purple capes.