THE THREE AMERICAN VICES

A reader approached me last month at the Investment U conference in
Delray Beach and said, "You sure have a knack for picking winning
stocks. How do you do it?"

"It's very simple," I said. I then whispered in his ear, "Lin
Yutang."

"Lin Yutang?" he asked. "Is that a new Chinese trading system?"

"No, I'm afraid not. It's a philosophy of life."

He seemed intrigued. I went on to explain that Lin Yutang was a very
unusual Chinese philosopher and writer who lived in both China and
the United States, and understood both cultures. He is known as the
philosopher of leisure and "letting go." I quoted his most famous
line - a line that usually angers Americans:

"The busy man is never wise, and the wise man is never busy."

I made the mistake of writing this statement on the blackboard on
the first day of class at Columbia Business School. A third of the
students left and dropped the class immediately. [But those who
stayed said it was the best class they ever took at Columbia. As one
student said, "We've never been taught anything like this before at
Columbia!"]

Yet there is wisdom in Lin's statement. If you are too busy in your
work, you don't have time to learn new ideas, to discover new
truths, to enjoy life's little pleasures, or perhaps to pick a
winning stock! Beating the market requires you to look down un-
trodden paths, and you need the free time to do it.

Lin Yutang criticized most Americans for being too busy, and
therefore too subservient to the business culture and the old ways.
Slaves to their work, they worry themselves to death. In another
startling statement, Lin states, "The three American vices seem to
be efficiency, punctuality and the desire for achievement and
success. They are the things that make the Americans so unhappy and
so nervous." Gee, I thought they were American virtues!

Lin goes on to say, "O wise humanity, terribly wise humanity! How
inscrutable is the civilization where men toil and work and worry
their hair gray to get a living and forget to play!"

Lin offers the secret to success for the businessman [busy man?] in
this following statement: "Actually, many business men who pride
themselves on rushing about the in morning and afternoon and keeping
three desk telephones busy all the time on their desk, never realize
that they could make twice the amount of money, if they would give
themselves one hour's solitude awake in bed, at one o'clock in the
morning or even at seven. There, comfortably free, the real business
head can think, he can ponder over his achievements and his mistakes
of yesterday and single out the important from the trivial in the
day's program ahead of him."

Lin Yutang is a champion of the individual - "its unreasonableness,
its inveterate prejudices, and its waywardness and
unpredictability." But in today's society, the individual free
thinker is being replaced by the soldier as the ideal. "Instead of
wayward, incalculable, unpredictable free individuals, we are going
to have rationalized, disciplined, regimented and uniformed,
patriotic coolies, so efficiently controlled and organized that a
nation of fifty or sixty millions can believe in the same creed,
think the same thoughts, and like the same food." Lin goes on to
warn, "Clearly two opposite views of human dignity are possible: the
one believing that a person who retains his freedom and
individuality is the noblest type, and the other believing that a
person who has completely lost independent judgment and surrendered
all rights to private beliefs and opinions to the ruler or the state
is the best and noblest being."

Lin dislikes the popular trend of compartmentalizing people in
groups and classes. "We no longer think of a man as a man, but as a
cog in a wheel, a member of a union or a class, a 'capitalist' to be
denounced, or a 'worker' to be regarded as a comrade...We are no
longer individuals, no longer men, but only classes."

Lin Yutang experienced the brutality of Chinese communism and the
heavy-handed bureaucracy of Washington during the New Deal era.
Needless to say, he has a low opinion of government. "I hate censors
and all agencies and forms of government that try to control our
thoughts."

He also questioned the establishment economist and
forecaster: "Perhaps I don't understand economics, but economics
does not understand me, either. The sad thing about economics is
that it is no science if it stops at commodities and does not go
beyond human motives...It remains true that the stock exchange
cannot, with the best assemblage of world economic data,
scientifically predict the rise and fall of gold or silver or
commodities, as the weather bureau can forecast the weather. The
reason clearly lies in the fact that there is a human element in it,
and when too many people are selling out, some will start buying
in...this is merely an illustration of the incalculableness and
waywardness of human behavior, which is true not only in the hard
and matter-of-fact dealings of business, but also in the shape of
the course of history."

Lin Yutang was probably unfamiliar with the one school of economics
that does take into account human behavior: the Austrian school of
Ludwig von Mises and Friedrich Hayek. That's why Mises's magnum opus
is called Human Action!

Lin Yutang has many more things to say about our culture and how to
live a happy and fulfilling life...about growing old gracefully
("The East and West take exactly opposite points of view. In China,
the first question they ask is, 'What is your glorious age?'I've
only scratched the surface of this brilliant Chinese philosopher.

This was from an article that was written by Mark Skousen



p.s. ( From The Lascone ) We can learn so much from Lin Yutang. In life (as
well as trading ). Try to be patient, sit like the tiger in the brush. When
opportunity comes along ... Pounce quickly. I encourage readers to
buy Lin Yutang's book, The Importance of Living. It was written in
1937, but in today's' hustle and bustle world, it is even more
relevant.

Good Luck Trading in the New Year MarketTraders