Exploring Telic and Atelic Activities in Investing

During their recent episode, Taylor, Carlisle, and Cunningham discussed Exploring Telic and Atelic Activities in Investing, here’s an excerpt from the episode:

Tobias: We’ve come up to the top of the hour. JT, you’ve done a lot of travel. Do you have a veggies?

Victor: Here you go. [laughs]

Tobias: Give the people what they want.

Jake: And apologies to everybody from last week, because I had them ready to go. I had to catch a flight like right in the middle of the podcast. So, it was very unfortunate. I felt like a bad host. I just left Toby on his own to [chuckles] defend.

Victor: He did fine. [laughs]

Jake: I had the utmost confidence that he would be fine. All right. Actually, I learned a few new words while I was reading this book called Four Thousand Weeks by Oliver Burkeman. Actually, I really enjoyed it. I thought it was pretty poignant. But if you’re like me and you find yourself thinking about the future a lot, and its at the expense of the present and being present, that book could be a valuable read for you.

So, these new words that I learned are telic and atelic activities. So, we’ll start with telic. That word is derived from Greek word, telos, meaning and or purpose. In Austrian economics, you might have come across this term, teleological, which means starting from the end and then reasoning back and explaining things based on their end purpose. It ends up connecting then with subjective value theory and von Mises and praxeology, which is really just a study of human actions toward some purposeful behavior.

And so, telic activities are goal oriented and they’re performed with the end in view. And in investing, we might call it like systematic planning and focusing on outcomes. For instance, buying stocks with the expectation of a certain percentage return. These activities are really driven by satisfaction that comes from achieving a goal. Once that goal is reached, the activity’s purpose is fulfilled. You made your money, you time to sell and move on. There’s something very defined and explicit about it, and maybe even transactional feeling.

Now, let’s contrast that with atelic activities. Of course, a prefix of A means opposite. So, here it’s an activity where the value isn’t derived from the ultimate aim. It’s not done with some terminal goal in mind. It’s for the sake of the activity itself. Sometimes these are belittled as hobbies even. But there’s a few examples in nature of atelic activity. Many birds engage in, what appears to be, just spontaneous singing. This form of birdsong occurs outside of the context serve some other purpose. They just do it for the active itself. Maybe it’s just a pleasurable for the bird.

Dolphins are famous for this. They engage in play, they surf, they play with seaweed, they blow bubble rings. There’s a lot of screwing around when you’re a dolphin. There’s no obvious survival function here. It just seems to be performed for the sheer enjoyment of it.

So, this brings up then like Robert Hagstrom, actually, I think, who’s coming on the show in a few months or a month or so.

Victor: Oh, great.

Jake: He wrote a terrific book called Investing: The Last Liberal Art. And in it, Hagstrom weaves together unrelated disciplines into a lattice work. The point is really that investing can offer an element of atelic activity. Like, you’re learning to just do things for the fun and the joy of it and the learning of it. It doesn’t have to be necessarily about achieving some specific endpoint. Like, you can just enjoy the learning journey. Perhaps, maybe the ultimate atelic activity is just like simply walking. You usually end up right back where you started. You often don’t know what the exact path that you’re going to take. And that’s okay.

Rarely do you get a walk done– Like, normally, [chuckles] you don’t reach a point in life ever where like, “Well, we’ve accomplished all the walking we’re aiming to do.” Like, “We’re done now.” Imagine like, “I’ve really checked off that lifetime walking box. What’s next?” [Victor laughs] So, I think that when you look at investors and study them, I think you find that the best are energized by the atelic nature of their craft. It’s not a necessarily atelic exercise. And if anything, that the success of the telic activity is really more residue of just being naturally interested in it.

Buffett boils this down and has said this many times. But when he’s considering buying a business from an entrepreneur, he’s looking to answer the following question, “Do they love the business or do they love the money?” I think the best investors, they love the game, they love everything about it, much more so than necessarily even the results. They like the money too. But it’s really more about just the passion for the game. And Marty maybe was one of the best examples of that.

Victor: Oh, absolutely. Most of Marty’s clothes were free stuff that the firm gave him during [Jake laughs] Christmas parties and stuff like that. He took the subway to work as long as his wife would let him. The material parts of his life were not there.

I heard a story that when he was at book signing and one of his neighbors wasn’t there. You might know Marty’s, the business school is named after him at Syracuse University. This person has been living next to him for probably 30 years and he said, “I had no idea. I had no idea.”

[laughter]

Victor: “I don’t know anything about this guy.”

Jake: Also, why don’t you mow your lawn?

Tobias: [laughs]

Victor: He had a very generous heart and he gave liberally. But he was 100% atelic. It was all about the process and doing the work, and he would just say, “Give me the papers.” And then he would [Jake laughs] sit in his office and read the papers. That was what he did.

For folks like us, and I mentioned this in the pre, even though he retired from running public money in 2012, he never lost interest in the game. He managed his foundation and had management meetings in the office the day he passed. So, he loved doing the work. He had as nimble of a mind as you’ll ever see. I think he was a revolutionary in terms of helping create the bankruptcy industry. He saw around corners and other people did. But his focus on one thing–

He was a devout family man. I can’t say one thing, because that’s unfair. But he just loved practicing what he did. He did not care about the money at all. He accumulated it, because he made a lot of people rich in a process, and he deserved to get rich for that, but he didn’t care about any of that.

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