“If this, then…”

We should not attach our happiness to “If this, then…” statements. If only I got this job … this house … this girl … then I’d be happy.

Jonathan Haidt, in The Happiness Hypothesis, has done a terrific job explaining why “If this, then…” doesn’t lead to happiness. First, because pleasure comes from the journey (which is often a struggle) towards a goal, not from actually achieving the goal. Arriving at the destination doesn’t bring us more pleasure than we get by overcoming micro and macro struggles during the journey itself.

And second, Haidt writes, “The human mind is extraordinarily sensitive to changes in conditions, but not so sensitive to absolute levels.” In other words, we adapt. We adapt to bad things and good things. If pleasure is our core value, then it will ultimately lead to our unhappiness, because our minds will adapt to each new absolute level of pleasure. And then … well, we’ll need a constant increase in the level of pleasure to stay happy, but each increase of pleasure will make us less and less incrementally happy.

Psychologists call this hedonic adaptation, and it has the power to reduce our enjoyment of life.

“If this, then…” thinking is deeply encoded in our human DNA; it is often the default setting for our thinking. In attaching our happiness to externals (things we cannot control), we may find that once we get what we want we may experience a temporary feeling of happiness and then find ourselves in hedonic adaptation hell. Logan Pearsall Smith wrote, “There are two things to aim at in life: first, to get what you want; and after that, to enjoy it. Only the wisest of mankind achieve the second.”

Practicing negative visualization neutralizes (hedonic) adaptation. William

Irvine writes, “One key to happiness, then, is to forestall the [hedonic] adaptation process: We need to take steps to prevent ourselves from taking for granted, once we get them, the things we worked so hard to get.”

The easiest way to deal with hedonic adaptation is to set our goals so that we don’t even need to deal with it. This is why my goals for IMA are not to get to “this” level of assets under management, so that “then…” I am not even sure what that “then” is.

Our goals at IMA, just like our values, are process-based. We can control our investment process (though not always its outcome); we want to provide great service to our clients – we can control that; our goal is for the company’s operations to run with the precision and ease of a Swiss watch – we can control that; we can control the culture we create and how we treat our employees. Our final goal is to have fun while we are doing this.

Let’s zero in on investing. Investing, too, is a process-based endeavor. Though no two stock analyses are identical, the systematic way of approaching them is the same from stock to stock. Unless you are in love with the process, you’ll subject yourself to a life of misery, because the causal chain between a well-thought-out process and a good outcome often takes years to unfurl.

My investment friends will agree with me on this point: If you are investing solely to get rich and don’t enjoy the struggle, the ups and downs of the process, then you are destined for unhappiness.

I write a few hours every single day. When I’m done writing I have a similar feeling to the one I have after I work out at the gym. When I’ve worked out hard, the micro-tears in my muscles leave me with a feeling of fullness and growth. Despite the pain and struggle, writing gives a similar satisfaction, except not in my arms or abs but in the muscle between my ears. I receive satisfaction not just from finishing an article or a book, but from the journey itself.

My father’s best and oldest friend, Alexander, is a brilliant mathematician and an incredibly gifted teacher, loved by everyone who ever came in contact with him. Alexander and my father both taught at the Murmansk Marine Academy. Alexander had a younger brother who, when he died, left him several books. One of those books was Solzhenitsyn’s Gulag Archipelago. The book was banned in the 1970s in Soviet Russia.

One of Alexander’s guests must have seen Solzhenitsyn’s book at his apartment and reported him to the authorities, because one day he got a knock on his door by the KGB. They searched his apartment and found the book.

His superb reputation saved him from imprisonment, but he lost his job at the Murmansk Marine Academy.

The Academy faculty held a vote over whether to keep Alexander or kick him out of the Academy. The vote was almost unanimous: Yes, fire him. The only person who voted against was my father, risking his own career.

For 15 years Alexander’s goal was to get his teaching job back – that became the focus of his life. Then, in the 1990s, after the Soviet Union collapsed, the Academy took him back with open arms; he was reinstated. What happened next came as a great surprise to everyone: Alexander fell into a deep depression. His goal had so occupied him that achieving it sucked the meaning out of his life – now he was goalless and his life was empty.

This story has a happy ending, because his depression lasted a year or two, but then he found a new joy in writing books and teaching high school kids mathematics. In other words, what he valued in life had changed.

When I started studying for the CFA exam, I should not have tied my happiness to a “if this, then…” trap. After I passed the test (on the first try), I looked around, and nothing had changed. I had got through the “if this” part and “then…” there was nothing. Absolutely nothing. Nobody cared (maybe my parents and my brothers did). I got a raise at work, but that is not why I had done it. Luckily, I did not run out of good problems. I found a new challenge in teaching investing at the University of Colorado in Denver, and I also started writing.

When you are constantly trapped in the “if this, then…” thinking, you are ignoring the present. You may not even be aware of it, but life just slides by you. Paraphrasing the Stoic of Nebraska, constantly thinking about the future, being stuck in the “if this, then…” thinking, is like saving sex for when you are aged.

We should heed Seneca when he says, “True happiness is to enjoy the present, without anxious dependence upon the future … The greatest blessings of mankind are within us and within our reach. A wise man is content with his lot, whatever it may be, without wishing for what he has not.”