Summary: The simple “mind hack” you can use to program your brain for long-term investing success: it takes just five minutes, in the morning and evening.
A hundred years ago, Émile Coué changed the way people think.
He was an international sensation in America, England, and his native France. People lined up around the block to get into his lecture tours. His book smashed the bestseller charts.
That book, Self Mastery Through Conscious Auto Suggestion, taught a method for people to cure themselves of any disease, rid themselves of any habit, and accomplish any goal, within reason.
The testimonials poured in from around the world: Coué’s method had cured people of everything from insomnia to rheumatism to asthma. His audiences were moved to tears with joy and gratitude. He was the faith healer of his day.
Except, he would remind his followers, you are the one doing the healing, by 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’s the TLDR summary: every day when you wake up, and just before going to sleep, you repeat this phrase twenty times:
Every day, in every way, I am getting better and better.
The Coué Technique
Coué started his career in France as a pharmacist, and he quickly discovered what medical science today calls the placebo effect.
If he gave a prescription to a patient and raved about the excellent results it had obtained for other patients, they would frequently find the drug worked better.
Today, pharmaceutical companies spend millions of dollars developing drugs that can beat the placebo effect. They’ll give one set of patients the drug, and another set of patients a sugar pill: the new drug has to beat people. curing themselves with their own mind.
Coué believed we have not one mind, but two minds, which we call “will” and “imagination.” Although we believe we are masters of our will, we are actually mastered by our imagination.
Imagine you have a long plank of wood, one foot wide and thirty feet long. Coué asks you to walk across it: no problem.
Now imagine the same plank of wood is strung between the towers of a mighty cathedral, and you must once again walk across it.
The walking (ie, the willing) is the same, but now the imagination pictures the terror of falling to your certain death, and the act of walking becomes impossible.
Coué’s method was to demonstrate to his patients that the imagination controlled everything. Here’s a simple experiment you can try for yourself: for ten seconds, clasp your hands and squeeze them together so tightly that you can no longer pull them apart.
It’s an interesting exercise, because your mind is saying, “Of course, I know I can pull them apart,” but as long as you’re doing the exercise correctly, you can’t pull them apart.
Coué would use this technique, plus many others like it, to put his patients in a state of suggestion (today we’d call it hypnosis), then tell them that their ailment, habit, or life goal was no different than that hand- clasping exercise.
This applies to investors, whether you’re just starting out or you’re managing multimillion-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 is easy and fun, that 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 am growing more financially prosperous.”
“I am surrounded by loving and satisfying relationships.”
For a generation that had just lived through the horrors of World War I, Coué’s philosophy was a healing balm. Like today, there was a general mood of hopeless nihilism about the world; Coué offered a positive, hopeful outlook that we could generate within ourselves.
After years of seeing everything getting worse and worse, it was a relief for people to believe things were getting better and better.
“Every day, in every way, I am getting better and better.”
The Investor Takeaway
Most investors are slaves to their imagination.
When the market is going up, they imagine getting rich quick. FOMO floods their brain, and they jump in, fearful of missing the opportunity.
When the market is going down, FOMO turns to FUD, and they fear losing it all. They obsessively check the price, then sell their holdings, usually at a loss.
Coué believed the will is always a slave to the imagination: this is a universal law. No matter how strong-willed most investors think they are, they are in fact ruled by their imaginations.
The good news is the imagination can be trained.
Coué’s method – repeating your statement twenty times in the morning and twenty times before bed – is a good one. (There is research showing that writing it down each day can be even more powerful.)
The trick is to find the belief holding you back. In modern terms, we might call this “hacking your constraint program.” Often the belief is tucked away so deeply we may not even be consciously aware of it.
What are your imagination limitations?
“Everything I do ends in failure.”
“I’m too old / dumb / unfocused.”
“My ADHD makes me unable to follow through.”
“People like me aren’t good with money.”
“I do not have enough capital to do what I want.”
Our imagination can be our worst enemy… but also, Coué would say, our best friend. We can easily turn these statements around, like so:
“Each day I am growing more financially prosperous.”
“I absorb new information quickly and easily.”
“My mind is quick and agile, able to see in HD.”
“Everything I do creates value.”
“My body filled with health; My life is filled with wealth. ”
Plenty of self-help literature implies this is all you have to do: just hack your brain with these sayings, and the money will come rolling in. Of course, you then have to actually do the work.
But the work (ie, the will) is subject to the imagination. Put another way, the imagination is the causethe work 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-adjusted.
Every day, in every way, you can 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.