Summary: The simple “mental hack” you can use to program your brain for successful long-term investing: It only takes five minutes, morning and night.
A hundred years ago, Émile Coué changed mentalities.
He was an international sensation in America, England and his native France. People lined up around the block to join his speaking tours. His book broke the bestseller charts.
This book, Self-Mastery Through Conscious Auto-Suggestion, taught a method for people to cure themselves of any disease, get rid of any habit, and achieve any goal, within reasonable limits.
Testimonials poured in from all over the world: Coué’s method had cured people of everything from insomnia to rheumatism to asthma. His audience was moved to tears of joy and gratitude. He was the faith healer of his day.
Except, he reminded his supporters, you are those who heal, following this simple method.
I’ll get to his method in a moment, because we can apply it to investing, as well as everything else.
But here is the summary of TLDR: every day when you wake up, and just before going to bed, you repeat this sentence twenty times:
Every day, in every way, I am getting better and better.
The Coue Technique
Coué began his career in France as a pharmacist, and he soon discovered what medical science now calls the placebo effect.
If he gave a prescription to a patient and bragged about the excellent results he had achieved for other patients, they would frequently find the medicine worked better.
Today, pharmaceutical companies are spending millions of dollars to develop drugs that can overcome the placebo effect. They will give the drug to one group of patients and another group of patients a sugar pill: the new drug must beat the people heal oneself with one’s own mind.
Coué believed that we did not have one mind, but two minds, which we call “will” and “imagination”. Although we believe we are masters of our will, in reality we are mastered by our imagination.
Imagine you have a long plank of wood, one foot wide and thirty feet long. Coué asks you to cross it on foot: no problem.
Now imagine that the same wooden plank is suspended between the towers of a mighty cathedral and you have to cross it again.
The walk (i.e. the will) is the same, but now the imagination imagines the terror of falling to certain death, and the act of walking becomes impossible.
Coué’s method was to demonstrate to his patients that the imagination controlled everything. Here is a simple experiment you can try for yourself: for ten seconds, join your hands and squeeze them so tightly that you can no longer separate them.
It’s an interesting exercise, because your mind tells you, “Sure, I know I can separate them,” but as long as you do the exercise correctly, you can’t separate them.
Coué used this technique, along with many others like it, to put his patients into a state of suggestion (today we would call it hypnosis) and then tell them that their illness, habit, or life goal was no different. of this hand- tightening exercise.
This applies to investors, whether you are just starting out or managing multi-million dollar portfolios.
If you are convinced that investing is difficult and complex, it will be. If you flood your imagination with the idea that it’s easy and fun, it will happen too.
The key, of course, is repetition. Twenty times in the morning and twenty times before bed, you repeat your imaginative statement.
“My body is healthy and beautiful.”
“Every day I become more financially successful.”
“I am surrounded by loving and satisfying relationships.”
For a generation that had just experienced the horrors of the First World War, Coué’s philosophy was a healing balm. As today, there was a general mood of hopeless nihilism in the world; Coué offered a positive and hopeful outlook that we could generate in us.
After years of seeing everything go from bad to worse, it was a relief for people to believe that things were getting better and better.
“Every day, in every way, I’m getting better and better.”
Takeaways for investors
Most investors are slaves to their imagination.
When the market goes up, they imagine themselves getting rich quick. FOMO floods their brains and they rush, fearful of missing the opportunity.
When the market goes down, FOMO turns to FUD, and they fear losing everything. They obsessively check the price and then sell their holdings, usually at a loss.
Coué believed the will is always a slave to the imagination: it is a universal law. No matter how strong the will of most investors, they are actually ruled by their imagination.
The good news is imagination can be trained.
Coué’s method – repeating your statement twenty times in the morning and twenty times before going to bed – is good. (Research shows that writing it down every day can be even more powerful.)
The trick is to find the belief that is holding you back. In modern terms, we might call this “hacking your constraint program”. Often the belief is hidden so deeply that we are not even aware of it.
What are your limits of imagination?
“Everything I do ends in failure.”
“I’m too old/stupid/not focused.”
“My ADHD makes me unable to keep up.”
“People like me are not good with money.”
“I don’t have enough capital to do what I want.”
Our imagination can be our worst enemy… but also, as Coué would say, our best friend. We can easily reverse these statements, like this:
“Every day I become more financially successful.”
“I assimilate new information quickly and easily.”
“My mind is quick and nimble, able to see in HD.”
“Everything I do creates value.”
“My body is full of health; my life is filled with riches.
Many self-help publications imply that’s all you have to do: just hack your brain with these sayings, and the money will come. Of course, then you really have to to do work.
But the work (ie the will) is subject to the imagination. In other words, the imagination is the causework is the effect. Change your imagination, and you change the direction – and the results – of your work.
According to Coué, your imagination – your self-created beliefs – can be self-adjusting.
Every day, in every way, you box grow better and better.
The more you repeat it, the more you believe it.
The more you believe it, the more you will see it.
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