The concept of having soul in the game is very near and dear to my heart. When someone has soul in the game, you instantly recognize it. I know, you want to know which soul and what game I am talking about. We’ll do this, but first let me tell you about Jiro.

There is a wonderful documentary, Jiro Dreams of Sushi. It depicts 85-year-old Jiro Ono, proprietor of Sukiyabashi Jiro sushi restaurant in Tokyo. By outside appearance you’d think it was about the most unexciting restaurant you’d ever visit – a hole in the wall in a subway station with a seating capacity of ten at the sushi bar. That’s it! Not a restaurant you’d think would be worth making a documentary about.

Then you learn that this hole in the wall is the first sushi restaurant in the world to receive three Michelin stars. There are millions of restaurants in the world, and as of this writing only 135 had three Michelin stars. This tiny place is where Barack Obama and Japanese Prime Minister Abe went for sushi on the American president’s official visit to Japan.

What is so special about Sukiyabashi Jiro? It simply has incredible-tasting sushi. Every piece of sushi is crafted with the same care that Rembrandt took as he laid brush strokes on his masterpieces. Jiro is an artist in a constant, unending pursuit of trying to make the best sushi in the world, and he has achieved it. He dedicated every waking moment of his life to making the best sushi – and some not-waking ones, too. That’s why the documentary is called Jiro Dreams of Sushi – Jiro thinks about sushi so much that ideas of what sushi to make come to him in his dreams.

You can see this constant pursuit of perfection in little details: Jiro said that he recently realized that if the octopus is massaged for 45 minutes instead of 30, then this extra 15 minutes brings out an important flavor. Or, when a couple comes to the restaurant, Jiro makes the pieces of sushi for the woman slightly smaller. He explains that women have smaller mouths, and he wants the couple to finish each piece of sushi at the same time. He wants them to enjoy each piece together. Everything he does has this sort of incredible focus on every tiny detail.

Jiro is an example of total dedication to one’s craft – he undoubtedly has soul in the game.

So, what is “soul in the game”?

Let’s start with soul – that’s the immaterial part of us, our essence, the dearest part of ourselves. The game is whatever creative endeavor we are deeply involved in, be it running a company, creating art, writing, investing, or making sushi – any creative pursuit that you believe is worthy of your effort and time. When you have soul in the game, this pursuit has all of you, every ounce of your attention and strength and love.

I learned about soul in the game from one of my favorite thinkers, Nassim Nicholas Taleb. In his book Skin in the Game, Taleb touched just briefly on this concept, but it really stuck with me.

Before we go deeper into soul in the game, let’s discuss its cousin, skin in the game – a concept Nassim expounded on.
Skin in the game can be summed up in one sentence: you want to associate with people who will share not only upsides with you but also downsides. When someone is getting paid to sell you a product but captures no downside in the transaction (this describes the bulk of Wall Street transactions), that person doesn’t have skin in the game, and his advice may not be in your best interest.

You and I would not want to eat at Jiro’s restaurant if Jiro and his apprentices never ate the sushi they made. Eating their own sushi connects their self-interests to ours: not being sickened by uncooked fish.

I’ve designed my investing firm IMA so that we have skin in the game. Our business grows and shrinks with our clients’ success, but we don’t see that as real skin in the game; it’s a nail clipping from my pinkie in the game, at best. No, I have skin in the game because all my family’s liquid net worth – all my life savings – are invested in the same stocks my clients own. I and the people dearest to me (my family) share the upside, and most importantly the downside, of my decisions for IMA clients.

Soul in the game is the elevation of skin in the game to a much higher level. Now, the proprietor is connected to the product or service more than just through sharing upsides and downsides with his customers; his creation is indistinguishable from his identity. His self-worth is completely interlaced with his creation. Just as with Jiro and his sushi.

Taleb relates the concept of soul in the game through a discussion of artisans. When you love what you do, your work stops being work and becomes a craft; and no matter what it is, you do it with pride, love, and care.

Jiro’s documentary touches on that concept as well. After ten years of apprenticeship, Jiro finally allows his apprentice to make an egg custard (tamagoyaki). That becomes the apprentice’s sole focus for months. He goes through 200 batches before Jiro is satisfied with his egg custard and calls him shokunin – an artisan. Here is what being an artisan, having soul in the game, means to me (with Taleb’s help).

Artisans have sacred taboos. They won’t break them for financial benefit. My father was an artisan all his life – not just as an artist but as a teacher, scientist, and inventor. When we lived in Russia, my father earned his living as a professor, teaching at the most prestigious university in Murmansk. Bribes in Soviet Russia were as common as tipping at Denny’s. My father was constantly offered bribes for a passing grade, and he always declined without a moment’s hesitation. This explains our modest life in Russia.

Once, however, my father came close to sacrificing his sacred taboo. My mother was gravely ill. She needed medicine that could not be bought in the pharmacy (again, remember, this was Soviet Russia). A parent of a student “had connections” and volunteered to come up with the medicine if her son got a passing grade. But even then, my fathered tutored her son for weeks until he passed the exam, rather than just hand out a good grade where it was not deserved.

When we moved to the United States, my father was 58 years old, too old to learn a new language well enough to teach in it. Painting, his hobby, turned into his profession. Unlike most Russian intellectual immigrants, who ended up driving taxicabs or cleaning hotel rooms, my father blossomed in the US as an artist. He loved being an artist. But he always had taboos. For him, it was art first and profession second. He never allowed money to influence what he painted. If a patron ordered a painting, he’d only paint it if it was interesting to him. He never allowed what sold to determine what he created. The art was his north star, not the money.

For an artisan the love of his craft (which often borders on art) is his primary motivation; financial considerations are always secondary.

Warren Buffett says that he tap dances to work. He goes to work not because he cannot wait to earn another billion – he is giving the bulk of his money away, anyway – but because he loves investing. He is an artisan; investing is his art and craft. (I discuss this topic in greater detail in “Art or Craft.”) He has often mentioned that, for him, building Berkshire Hathaway has been akin to Michelangelo’s painting the ceiling of the Sistine Chapel.

Jiro’s restaurant has only ten seats. The cost of the meal is a prix fixe of $300. There is no menu –Jiro gives you 24 pieces of sushi in the sequence he chooses, to achieve the best dining experience. It is impossible to make a reservation at Sukiyabashi Jiro. In fact, Michelin recently removed its three-star rating because of the inability of the public to make reservations. This had no material impact on Jiro’s business – demand clearly outstrips supply. If money was a primary driver for Jiro, he could have expanded the restaurant to a hundred seats, opened a chain of them, or doubled his prices. He has not. Money is a secondary consideration, not a goal but a byproduct of what he does. His primary pursuit is to make great sushi, and financial success has ensued.

I can relate to this sentiment: investing is an incredible intellectual riddle that I have the privilege of attempting to solve every day. It is a never-ending journey of self-improvement. Though I don’t have Buffett’s wealth, nor do I aspire to have it, I feel exactly the same way about tap dancing to work (though at times I ride a bike or drive a car to get there).

At first unintentionally and later intentionally, I sculpted the perfect job. Thinking about investing and portfolios doesn’t just start when I come to work and stop when I go home. I have not yet achieved Jiro’s level of dedication – I am yet to dream of stocks. But they do follow me around. It’s a bit unhealthy, and there’s always a tug of war between work life and family life, but I still wouldn’t change a thing.

If I won a billion dollars in the lottery, my daily life wouldn’t change a bit
– I’d just have to work harder to make sure my kids didn’t get spoiled. I cannot see myself doing anything else with my life. At some point, as IMA continues to grow, if I feel our size is impacting the quality of our investment decisions or the service we provide to our clients, I’ll put the brakes on growth. We’ll simply stop accepting new clients. I am fine with “ten seats.”
For artisans money is a second derivative of what they do, the quality, the craft, comes first.

Over the years, with the advent of computers and consultants, an elegant but flawed theoretical framework, Modern Portfolio Theory, scientized and institutionalized investing. Large pension funds and foundations employ an army of consultants that slice and dice manager performance data (this is where computers become very handy). Inflows and outflows in a manager’s fund are completely driven by his short-term performance and how he compares against his peers and benchmarks. This is not an abstract process to a money manager, because his bonuses and employment itself are tied to the success of the assets he manages. He – it’s usually he – has a wife, kids, and bills to pay. These incentives are powerful and turn institutional investing into the Wall Street version of the Hunger Games, where winning and staying in the game is often more important than what is right for the client.

The concept of long term doesn’t exist in this game: If you’re fired in the short term, who cares about the long term. Managers start emulating benchmarks – if you stray far from the benchmark, “You are not doing what you were hired to do.” What your peers own becomes more important in your buying and selling decision-making than what will generate attractive long-term risk-adjusted returns (risk in this case being not volatility but permanent loss of capital).

But when a client turns their life savings over to you and you know your decisions will have direct consequences for their life, playing Hunger Games should never even enter into the equation. There’s an old saying: Companies get the shareholders they deserve. It’s true of investment firms as well. We wear our values on our sleeves, and we get the investors we deserve. IMA is lucky to have attracted clients who share our values. Our growth as a firm may have been slower than some on Wall Street, but growth for the sake of growth has never been our priority.

If you listen to conversations happening at IMA, you’ll often hear, “It needs to have soul in the game.” It’s at the core of everything we do. Neither the company nor I will ever have an extra ounce of reputation that we’d want to spare. After all, a reputation takes years to build but can be lost in minutes. If we do things with soul in the game, we’ll may make mistakes at times, but we’ll never have to worry about our reputation.

Marcus Aurelius said, “Do every act of your life as though it were the very last act of your life.”

Artisans are students of life, for life. I think of my father when I write this. In his late 60s, when he was already an established artist who had won many national exhibitions and had work exhibited in museums, he discovered a local artist whose paintings he admired. When he learned that this artist taught masterclasses, my father signed up without hesitation. He did not have to think about his pride or what he had accomplished; he saw someone he could learn from. So he did.

This student of life concept is very dear to me. It was a competing title for this book. I will repeat this point several times throughout the book, because it is worth repeating: Maintaining the attitude of being a perpetual learner, being openminded to new knowledge, is paramount in preventing your ego and your success from fossilizing and stifling your learning and self-improvement. Which brings us to our next point.

Artisans constantly strive for improvement. Jiro has been making sushi for over 70 years and is still learning. He says, “Even at my age, in my work… I haven’t reached perfection… There’s always a yearning to achieve more. I’ll continue to climb, trying to reach the top, but no one knows where the top is.” Making the best possible sushi is his sole goal; he is obsessed by it. Jiro’s oldest son shares his father’s values. He has said, “Always look ahead and above yourself. Always try to improve on yourself. Always strive to elevate your craft.”

Artisans have a very narrow, single focus. Jiro said, “I do the same thing over and over, improving bit by bit.” Epictetus said, “You become what you give your attention to.” Single focus combined with a drive for constant improvement, while being a student of life, adds up to an incredibly powerful force.

Claude Monet’s painting of Rouen Cathedral sums up the nature of artisans as lifetime students, striving for improvement, and with a single focus. In 1892, Monet, father of the Impressionist school of art, rented an apartment across from Rouen Cathedral. (I touch on this story in greater depth in “The Art of a Meaningful Life.”) For the next six months he painted a single subject – the cathedral. Monet studied light. He wrote: “A landscape does not exist in its own right since its appearance changes at every moment, but the surrounding atmosphere brings it to life – the light and air, which vary continually.”

Monet had a single focus. He was completely consumed by the cathedral and the light that fell on it. He wrote to this wife, “I work like a mad man; I cannot stop thinking of anything else but the cathedral.” He completed 30 paintings of the cathedral over the next three years. (He finished many of them in the studio afterwards.)

Monet was 52 years old, a very accomplished artist, and he had been painting for over 40 years. He was not too old to study light – he was a student of life for life. He wanted to improve. Finally, to have soul in the game, your pursuit has to be a net positive for society as a whole. This one is less tangible, but it doesn’t make it less important. The definition of shokunin goes beyond being a craftsman and having technical skills. It also implies an attitude and a social consciousness, an obligation to do one’s best for the general welfare of society. This aligns well with one of my core values: Leave the world a better place than you found it. What is the point of life otherwise?

By the way, this is not just an altruistic endeavor, it’s also a selfish one – all that you add to the world reciprocates back to you and improves your own life.

This is how I strive to lead my life. Just as important, it’s how I want my kids to lead their lives, too.

Love what you do.
See art in it.
Own it.
Have pride in it.
Hold sacred taboos.
Be a student of life, for life.
Focus, and strive for continuous improvement.
Be a net positive for society.

If you do all this, you may or may not have the fattest bank account, but you are guaranteed a fulfilling and meaningful life. It’s that simple: Have soul in the game!

I’ll leave you with Jiro’s advice for the rest of us: “Once you decide on your occupation… you must immerse yourself in your work. You have to fall in love with your work. Never complain about your job. You must dedicate your life to mastering your skill. That’s the secret of success… and is the key to being regarded honorably.”