At the end of a recent trip to the Century City Mall here in Los Angeles, I was standing in line waiting to put a dollar in the automatic parking kiosk, when I heard a recorded message coming from an overhead speaker. The voice on the recording was reminding those of us within earshot to pay for parking at the kiosk because there would be no attendant at the parking exit.
In the few minutes I had to stand there I could not escape the insistent voice that repeated the same reminder over and over again without a single pause. Obviously some shrewd mall executive thought this recording was a good idea and would prevent needless backup at the parking lot exit. By the 18th or 19th repetition I also had a good idea: The CIA could use this recording to extract valuable information from high value terrorists. I was certain that even the most hardened ideologue would do anything in order not to hear that message one more time.
I was reminded of this experience while reading Matthew Crawford’s insightful and fascinating book “The World Beyond Your Head” (Farrar, Straus and Giroux). Crawford discusses the value of and struggle over a critical human resource—one whose control is worth an enormous amount of money: our attention. Ironically, in his research Crawford discovers that with rare exception, attention hasn’t yet achieved the level of consensus in our society to be considered a resource, much less a valuable one.
Commercial interests, on the other hand, know exactly how valuable our attention is—and they spare neither cost nor creativity in their quest to get as much of it as they can.
The investor in me is impressed by the extraordinary level of sophistication and ingenuity currently in use by those companies who benefit from controlling our attention, while the individual in me is angered and saddened by the manipulative and surreptitious intrusion into our lives.
Crawford highlights one such manipulation by comparing it to its real-world analog: As hockey players increase their skills, at some point they start to experience their sticks as parts of their own body. Studies describe this sensation as “cognitive extension”; the players’ brains no longer distinguish their sticks from their arms. The increasing competence they gain with this “new” part of their body is a pleasurable and reinforcing experience.
Large gaming companies have become experts at creating an “experience” for slot machine players that mimics this pleasure/reinforcement cycle—so much so that slots have become their single most profitable source of revenue. Of course the problem is that the very real pleasure the gambler is receiving from the experience is not built on his growing competence with the slot machine, but rather a calculated deception programmed to keep him playing as long as possible.
Most of our waking hours are spent in what Cory Doctorow terms, “an ecosystem of interruption technology.” It is so prevalent that we have become used to it; everyone has their own individual strategy for carving out some normalcy within its growing boundaries. But attention is a finite resource and Crawford warns us that, “Without the ability to direct our attention where we will, we become more receptive to those who would direct our attention where they will.”
Investing is not an easy enterprise even in the best of circumstances. The most basic obstacles we face are considerable and complex: No matter how much information you possess it is just a fraction of what’s out there; there are always other investors with more resources, more intelligence and more experience than you; and even if you are the smartest, most experienced and have access to more resources than anyone else, you will never run out of mistakes. And that is before your behavioral and social biases kick in to further cloud your judgment.
Despite these external and self-imposed hurdles we still have a fighting chance if we can reserve enough of our own attention to apply to the task at hand.
I made a quick inventory of the various things that vie for my attention during an average working day: telephone calls, texts, emails, faxes, What’s App postings, Wall Street Journal, New York Times, Financial Times, Economist, dozens of blogs, dozens of financial posts on Twitter, various research reports, daily portfolio management tasks, business management tasks, research for my latest column, writing and thinking.
Ironically, it was taking on writing this column each month that forced me to reprioritize my day and set aside a block of quiet uninterrupted time to think and to write. Sometimes it’s just 10 minutes—every once in a while I can put aside a few hours. But the cumulative benefit of this practice is the reclaiming of enough of my own attention so I can feel confident in my choices, which while never perfect are built on a firm foundation of critical thinking and silence.
Crawford writes: “Just as clean air makes respiration possible, silence, in this broader sense, is what makes it possible to think.” He notes that silence has become a luxury item, for sale to the select few who can afford it: “In the business-class lounge at Charles De Gaulle airport, what you hear is the occasional tinkling of a spoon against china. There are no advertisements on the walls, and no TVs. This silence, more than any other feature of the space is what makes it feel genuinely luxurious.”
Crawford has a fascinating insight into a subject that is particularly relevant for investors today. The issue on his mind is: How do we make judgments about something where we don’t possess expertise? He writes: “We are not competent to judge everything for ourselves. We know this; we feel it. We cannot look to custom or established authority, so we look around to see what everyone else thinks. The demand to be an individual makes us feel anxious, and the remedy for this, ironically enough, is conformity. We become more deferential to public opinion.”
The paradoxical source of this kind of behavior is our otherwise healthy and beneficial Western philosophical, political and scientific tradition. As a result of our collective knowledge we can understand and manipulate our physical world in ways that were inconceivable even 50 years ago. But Crawford points out that the same world view that has allowed us so much collective mastery over our world has also disengaged us from it, resulting in a fragility and insecurity that leaves us more individually vulnerable to exploitation.
Some who read Crawford’s book might conclude that his solution to our modern-day problems is for all of us to become 16th century artisans. My take is different: He wants to reintroduce traditional learning-by-doing as a counterweight to the direction of modern life.
The experience of engaging the world through the building of a skill—any skill—results in a more balanced perspective of the world and ourselves. This process doesn’t translate into the kind of collective power that we have become accustomed to—but because we are more engaged with the world and more secure in ourselves, we are far less vulnerable to having our identity or attention exploited.
Investing is like any other human activity; the balanced perspective and wisdom gained from engaging the world in order to develop our skills will be available when we need them most. Today’s accepted wisdom is that active investing in securities is too hard, too complex and too difficult for even experts to try. This is the message to disengage. And while disengaging may continue to be a profitable choice, the long-term cost is likely to be a continuing decline in the health of our decision-making, our individual judgment, and whatever is left of our precious attention.