Leading from the Center: Dalio, Hagan, and Freeman on Meditation and Leadership

Categories: Behavioral Finance, Leadership, Management & Communication Skills
Meditation

Georgetown University’s McDonough Business School played host to a watershed event in the history of business school education on 9 April 2013. Dean David Thomas announced that Georgetown is going to teach meditation to its business school students in a semester-long course. This first-of-its-kind class seeks to convey the benefits of meditation, which have been espoused by Ray Dalio, the world’s most successful hedge fund manager ($138 billion AUM); Bill Gross, the world’s most successful bond fund manager ($2 trillion AUM); and the late Steve Jobs, former CEO of Apple (AAPL). Thomas made his announcement about the unique course at a panel that featured the International Monetary Fund’s general counsel, Sean Hagan; world-renowned spiritual leader, Father Laurence Freeman; and none other than Ray Dalio himself, representing his firm, Bridgewater Associates.

Meditation is a practice that allows you to better utilize your entire brain, rather than just your analytical, rational faculties. Clearly, for investors these are critical skills. In fact, Dalio repeated a common refrain in his public comments about investing: That most of the alpha he has generated for clients over the years — average annual returns for more than two decades in excess of 16%, with 11% standard deviation — is a result of his meditation practice. Similar strong sentiments were shared by both Hagan and Freeman.

For many a meditative state is achieved by repeating a mantra — a series of words that do not have a direct meaning to your life. Importantly, while repeating the word, or series of words, you try not to get off course while repeating the mantra. Most people are initially frustrated by this experience as their minds continue to interrupt the peaceful flow of the repeated mantra. Frequently, the analytical mind intrudes and begins evaluating the exercise: “Why am I doing this?” Or, “Am I doing this right?” Or, “When will this end?” Yet, as Freeman pointed out, “Saying the mantra does not make you distracted; it actually reveals how distracted you are normally.”

All of the panelists agreed that a strong meditation practice gives you the ability to see things that no one else is seeing. This was acknowledged powerfully by Bridgewater’s Dalio, who said that meditation was like being invited to an orchard full of fruit and being able to see which fruit was most ripe to pick — referring to his world-famous ability to chose the correct investment opportunities.

Furthermore, each panelist stated that it was easier to make decisions free of emotional attachment. Most of us let our emotions interfere with our decision making. Consequently, our decisions are more a reflection of our current emotional state and our preferred outcomes, rather than reflecting reality. In other words, meditators’ decisions are more accurate than the decisions of non-meditators. The speakers also believe that it takes meditators less time to make decisions.

In a world of entrenched points of view, usually at odds with one another, meditators are frequently able to experience opposing viewpoints as complementary rather than as a paradox of opposites, where both outcomes seem simultaneously true and wrong.  This benefit of being able to break free of the tension of paradox was especially emphasized by Father Freeman and the IMF’s Hagan as leading to new possibilities for successful decision-making.  Whereas the left brain obsesses with knowledge, the right brain, released by meditation, leads to creative realizations; read: alpha.

According to the panelists, a funny thing happens the more you meditate: You start to realize the interconnections and intimate associations between ideas, concepts, and events. Eventually, dipping into the “interconnectedness well” results in a stronger sense of your relationship with all human beings. Hence, meditation leads to greater humility, authenticity, and a sense of teamwork. Not surprisingly, these are also among the most desirable traits in our most revered leaders and the most powerful reason for Georgetown’s endorsement of the benefits of meditation. To this end, each panelist has tried to instill meditation’s benefits in the culture of the organizations for which they work. Bridgewater, for example, endorses a policy of radical transparency in which ideas and opinions are openly discussed without regard to hierarchies and the status quo. At the IMF there are two meditation rooms where staffers can duck in to change their thinking and experiences by getting in a quick meditation.

Last, if nothing else, each practitioner — Freeman, Hagan, and Dalio — emphasized that meditation is a brilliant stress reducer. So when the financial markets are chaotic; when Europe is in turmoil; when central banks announce more quantitative easing; or anything else stressful happens — stop and take a moment to engage in silent contemplation. You will reduce your anxieties and gain the ability to make a better decision under uncertainty. And frankly, that is the name of the game in investing.

If you’re interested in meditation, join the LinkedIn CFA Inititute Members Meditation Group [Note: you must be a Member of CFA Institute to join].

Authored by Jason A. Voss, CFA


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©iStockphoto.com/Kaligraf

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16 comments on “Leading from the Center: Dalio, Hagan, and Freeman on Meditation and Leadership

  1. Pingback: Meditation | Aaron Careaga
    • Hello One World Still,

      I am glad that you found the piece interesting. In my investment management career I found meditation to be essential for my success, regardless of the scale considered: mind, body, spirit, and accounting ledger.

      Look for more on this subject here in the future!

      With smiles,

      Jason

  2. vikas said:

    hi jason great article indeed and i know the benefits of meditation as i am fortunate enough to be born in a civilization that as practised it for hundred of years

    • Hello Vikas,

      I’m pleased that you enjoyed the piece. I am not sure of your culture, but I bet you are being modest with your civilization’s meditation tradition stretching back hundreds of years. Most likely it stretches back thousands of years.

      Thank you for sharing!

      Jason

  3. Sanjay Parikh said:

    Hi Jason,

    Sadly, we are forgetting our culture but it is catching on in other countries. I did not expect to see this piece on the CFA website and was surprised to see it. I have tried to meditate many a time and never seem to have got it. It is on my bucket list. After this read, will get back to it earnestly. Thanks very much

  4. Pingback: Advice on How to Become a Research Analyst | CFA Learn
  5. Sanjay Parikh said:

    Hi Jason,

    Sadly, we are forgetting our culture but it is catching on in other countries. I did not see this piece on the CFA website and was surprised to see it. I have tried to meditate many a time and never seem to have got it. It is on my bucket list. After this read, will get back to it earnestly. Thanks very much

  6. Hello Sanjay,

    Thank you for your comment! It’s nice to read that you were pleasantly surprised that CFA Institute featured a piece on meditation. I can promise you that there will be more coming in the future, too!

    Best wishes for success in your meditation practice!

    Jason

  7. Satya said:

    Great article.
    Being a meditator myself, I think it is highly relevant for other professions as well.

  8. Pingback: Semester Long Meditation Course for Business Students at Georgetown | Portland Mindfulness Programs
  9. Pingback: Why Do Outstanding Investors Meditate? | iValueInvesting

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