Welcome to The Alpha Snail! I already like you just for being here.

If you’re interested in learning more about finance and wealth creation—and don’t mind a dash of philosophy—you’re in the right place!

If you subscribe below, not only will you receive one locally-sourced handcrafted email from me each week, but you will have my eternal love and admiration.

Under a warm, cloudless sky, six dozens athletes make their way into position. With great care, they secure their competition day bib to the front of their jerseys, and find a soft seat in Ichon Hangang Park.

There used to be many more, roughly 2000 more, but the elimination rounds have weeded out all but the best. Today, the elite have come out to compete, and within 90 short minutes, we’ll know who truly deserves the title of “Most Chill”.

We are, of course, at The Space Out Competition. This very real, and very televised competition is held annually in Seoul, South Korea. Jiwon Kim, a journalist for VICE, and spectator of the event, writes that the rules are simple:

In an interview with VICE, the creator of the competition, visual artist WoopsYang, elaborated as to why she started the event.

The Space Out Competition is a testament to the idea that, doing nothing is harder than it looks. Let’s explore why that might be, how distractions are hurting our decision making, and what we can do about it.

Your Own Worst Enemy

As in investor in the United States, you have it pretty easy. For over a century you could throw your money in the stock market, and in a matter of years, expect to take quite a bit more out. This phenomena is so well documented, that we can pinpoint how long “a matter of years” actually is.

When looking at index investing in the United States, there has never been a 20 year holding period, where you would actually lose money.

That means if you bought a slice of the S&P 500 Index any time over the past 100+ years, and held it for 20, you would make money. Regardless of time period.

For example:

If you bought at the peak of the Dot Com Bubble, the absolute height of irrationality and excess, and held it for 20 years, you would still make a boatload of money. Surprisingly enough, almost 20 years after that peak, was the COVID Stock Crash.

Even the cardinal sin of “buy high, sell low” seems to work over a 20 year period. As a matter of fact, you would have made +46% on this “awfully timed” trade.

And yet, knowing full well the power of patience, we’re constantly buying and selling. Constantly making moves. Constantly losing. We’re our own worst enemy.

Why is it so damn hard to do nothing?

Attention Deficit and Action Bias

When trying to understand why it’s so hard for us to do nothing, there are two glaring suspects. First is Attention Deficit, and second is the much more pernicious Action Bias.

The Three Horsemen of Self-Sabotage

In recent years, there has been a striking increase in young people diagnosed with ADHD, or Attention-deficit/hyperactivity disorder. The CDC mentions a litany of symptoms when outlining this disorder, but for our purposes, there are three in particular I’d like to draw your attention to. We could go so far as naming them the “Three Horsemen of Self-Sabotage”.

1. Making careless mistakes

2. Taking unnecessary risks

3. Having a hard time resisting temptation

Although many of us are not suffering from clinical levels of ADHD, understanding the symptoms of this disorder are important. I highlighted these three because at least one of them probably rings true to you in some capacity. I can, in my own life, point to times where I’ve fallen victim to each, specifically in periods of lacking attentive control.

These Three Horsemen of Self-Sabotage, can be attributed to many of our greatest mistakes and wrong turns. By not only identifying them, but linking them with our own levels of Attention Deficit, we can begin to unwind the role they play in our lives.

As with many medical disorders, we often find ourselves somewhere on a spectrum between mild to debilitating. While this isn’t an attempt to make light of ADHD, I do think the comparison is appropriate for understanding how our attentions have become increasingly limited in the age of infinite distraction.

The Age of Infinite Distraction

We’ve all begun to feel the creeping sensation that our attention is being sapped. Flitting from Instagram to Slack, or scrolling Twitter while listening to a podcast, our attention really ain’t what it used to be.

In an interview with The Guardian, Dr Sharon Horwood, a psychology and human-computer interaction researcher, discusses the effects that cellphones and tablets have on our attention.

We don’t really need a professional to point this out to us. It’s something we all intuitively know is going on.

For example: A few weeks ago, during my morning run, I was hit by a car pulling out of a driveway. Only 5 seconds after hearing the sound of my knee make contact with the hood of their car, did they look up from their phone.

This isn’t exactly a new phenomena either. In an article written in 2008 for the Atlantic, just one year after the first iPhone was released, Nicholas Carr addressed the toll that “The Net” was taking on his attention.

Our waning attentive abilities are leading us to make decisions that are not in our best interest, and that upon reflection, may leave us scratching our heads asking “Why did I do that?”.

• We’re slower

• More scattered

• More careless

• Less emotionally stable

• Taking greater unnecessary risks

• With a lower temptation threshold

To a greater or lesser degree, we’re all susceptible to the havoc Attention Deficit can cause in our lives. But it is just the first culprit of our story. Now let’s turn to its far more seductive sister, Action Bias.

The Panenka

It goes by many names. In Italy “Il Cuchiaio”, Argentina “Picado”, and Brazil “Cavadinha”. It means: pop the ball up and send it straight down the middle. The common name is Panenka, and it works like an absolute charm.

In the low-scoring game of Soccer, where many matches end within a point of each other, the penalty kick is a unique opportunity to turn the tide. A one-on-one, high stakes showdown, between the kicker and the goalkeeper. The pressure is on for both. Who would dare a Panenka in this situation?

The Panenka, seen above, is as a risky move, but after analyzing hundreds of penalty kicks a counterintuitive fact emerged. In a paper titled Action Bias among Elite Soccer Goalkeepers, Michael Bar-Eli determined that,

So what is this Action Bias we’re hearing so much about, and why are so many Goalkeepers susceptible to it?

Action Bias

Well it’s almost exactly as it sounds. Action Bias is the false belief that “doing something” is better than “doing nothing”.

The Decision Lab defines it neatly:

Goalkeepers, during a penalty kick, “feel” that jumping left or right is better than staying center and doing nothing. The impetus behind their dives are deep, animalistic, and completely irrational. A classic Action Bias.

In a world that rewards busyness and action, it’s nearly unthinkable to “do nothing”.

Imagine telling your boss that the reason you didn’t conduct your weekly report is because, it’s sometimes better to “do nothing” and you didn’t want to “fall for the Action Bias”. Might as well start packing your things now.

Most attribute the power of Action Bias to public perception, judgment from peers, and regret. Think of the two scenarios; staying centered as a Goalkeeper, or diving to one side.

• How would it look if you stood flat footed in the center, while the kicker blasted the ball into the left side corner? You’d look like a fool. Your own fans may even boo you.

• Now what if you heroically and whole heartedly dove to the left, while the ball cruised straight down the middle? Well, still a bit foolish, but at least you tried. Maybe the kicker faked you out with their eyes, or hip position. You could always point to something else as the reason for the miss.

Most importantly, a Bias for Action allows us to save face. By “doing something” we have shielded ourselves from the pejorative of “lazy”. While we still may end up with egg on our face, at least we can say we tried.

Our feelings and the perceptions of others, as it turns out, will play an important role in understanding the dual headed monster of Action Bias and Attention Deficit.

Idle Hands

The pressure to act, is so deeply and inescapably woven into our culture, that there’s even an expression for it. “The Devil makes works for idle hands” . We’re taught, from a very young age, that the easiest way to stay out of trouble is to keep going, keep moving, and just keep doing.

There are three major reasons that lead us to the conclusion that “Idle Hands” are something to be avoided.

Control

Control is invigorating. Although we may be able to recognize most feelings of control are illusory, we still seek them out. Control is security and assurance, in a complex and unpredictable world.

By defaulting to action, we are inherently choosing to try and control the situation. The inverse, inaction, is a surrender to circumstance. While both may ultimately yield the same result, it is far more comforting to believe that we can exert some level of control over our lives.

In an article on Action Bias, The Decision Lab, a decision research organization, writes:

This is the beginning of a positive feedback loop. Every time we act, we feel better about ourselves. We feel as if we gave it a solid effort. If our actions appear to have made a difference, we resolve that “acting” is a good strategy in the future. If our actions prove unfruitful, we chalk it up to circumstance or bad luck.

This is actually a well documented phenomena called Self-Serving Bias, but that’s a story for another day.

Praise and Condemnation

Michael Bar-Eli, the researcher responsible for our penalty kick study, conducted follow up interviews with 300+ professional Goalkeepers. What he sought this time was their attitudes toward action and inaction.

Praise and condemnation from teammates, fans, coaches, and managers drove many of the feelings behind their Action Biases. A dive left or right, in this case, was largely motivated by the norms of the sport. Breaking those norms was simply too great of a reputational risk to take.

Excitement

The rush that comes along with action can be intoxicating. In contrast “Not Doing”, as you would expect, is quite boring. The need to seek out novelty, and emotional highs is part of the human condition. When taken to its extreme, this desire manifests as addiction. It’s no wonder why gambling is “the most common impulse control disorder worldwide”.

Much like gambling, the allure of active investing, as opposed to passive, can largely be attributed to its far more exciting nature. Although all data suggests that long term, broad based, index fund investing is a “no lose” situation, we still can’t help but intervene and muck it up.

Peter Lazaroff, Chief Investment Officer at Plancorp, which manages over $5.5 billion assets, has some thoughts on “exciting investments”:

It seems that the bridge between Attention Deficit and Action Bias may be this key element, excitement. But how harmful could our need for novelty really be?

Deeply Uncomfortable Doing Nothing

How comfortable are you sitting alone quietly?

As part of a study on “Thinking Periods”, researchers at University of Virginia in Charlottesville left participants alone in a room for 15 minutes, with two options. The first, do absolutely nothing. The second, electrocute themselves.

That’s right, the old electrocute yourself experiment. A classic.

Well, there’d be no sense in me sharing this if the result was a normal, rational, and sane. And alas, it was not.

“Even though all participants had previously stated that they would pay money to avoid being shocked”, a sizable percentage had elected for electrocution, rather than sit alone and do nothing.

More precisely, 25% of females and 67% of males, would rather get a quick zap, than sit alone with their thoughts for just 15 minutes. Shocking.

Timothy Wilson, the lead researcher of the study, concluded:

Is the lack of stimuli so unnatural, that our mind literally revolts, betraying us to the first thing it can find? In this case, physical pain.

Or are we simply “doing” for “doing’s sake”? Are we electing to act, with the knowledge that our behavior is irrational, nonsensical, and even harmful?

This finding should give you pause. Are we witnessing an Attention Deficit or an Action Bias? Maybe a bit of both.

It seems the lines are beginning to blur.

Don’t just do something, stand there!

As much as we’d like to believe in agency and individualism, we are truly byproducts of our culture. A woman living in 1850’s rural China is a very different from one living in modern day New York. Where we are, when we are, and the zeitgeist in which we live, is the very fabric from which we are made.

Language offers us a unique tool for peering into a culture, and in doing so, helps us better understand its members. Especially illuminating in this respect are untranslatable words.

Untranslatable words suggest that one culture has an element, value, belief, theory, or concept, that simply does not exist in another. The inability to translate therefore, means there is a fundamental disconnect.

Let’s take a look at three untranslatable phrases that will help us understand how Attention Deficit and Action Bias are not universal phenomena.

Wu Wei

Dolce Far Niente

Niksen

Each one of these contributes to an idea I call Strategic Inaction. The common thread between Wu Wei, Dolce Far Niente, and Niksen is the choice to “actively do nothing”.

This is not laziness, this is not sloth. This is deliberate and methodical nothingness.

Strategic Inaction is remembering that “nothing” is always a choice on your menu of options.

Choosing Inaction

Warren Buffet, you probably know, but for whatever reason his partner of 40 years Charlie Munger, seems to have flown entirely under the mainstream radar.

As two of the greatest investors in history, their strategy is simple. It exemplifies the best of both action and inaction. Munger describes it as:

Action is not the enemy, and it never was. Buffet and Munger had to actually make decisions, conduct research, and ultimately trade in order to become the great investors that they are today. Very little, after all, can be done through inaction.

Although action for its own sake should be avoided, the real enemy is forgetting that “nothing” is always on the table. We can always choose to stop and reflect. We can always choose to wait, to observe, to be still.

The secret to Mungers statement lies in just a few words “We've got great flexibility and a certain discipline”.

Buffet and Munger are beholden to very few. If they sit on the sidelines, and do nothing for a year, they will still be two of the best investors of all time. If you don’t send your weekly reports to your boss, you will soon be unemployed. This is the difference. This is the first secret. Buffet and Munger have freed themselves from the fetters of societal expectation.

Sound familiar? Praise and Condemnation, anyone?

The second piece is discipline. By reframing inaction as a choice, rather than an abdication, we take control of our lives. We chose our own fate. Discipline is also the tool that helps us tame our desire for novelty and excitement. Although easier said than done, Discipline equals freedom.

Conclusion

Chilling out is a skill.

Sometimes, standing still and centered is the best choice.

Our inability to sit alone in a room can have shocking consequences.

Nothingness should always be a choice.

Flexibility frees you from others, Discipline frees you from yourself.