The Virtuous Investor

I am not a religious person, but sometimes I read old religious texts to extract their philosophical teachings. And recently, I stumbled across an old text written by Erasmus of Rotterdam in 1503. The book is reportedly a handbook for a soldier who appeared uncivilized, yet friendly, when he met Erasmus. The wife of the soldier asked Erasmus to write a text that would help her husband rectify his behaviour. The end product is the Manual of the Christian Knight, which became very influential and widely read in the 16th century. 

What intrigued me about this text are two things. First, Erasmus did not emphasise the need to observe Christian rituals and ceremonies. Instead, he wrote a manual on how to live a good life without the need to participate in superficial rituals that seemed meaningless to the soldier. I love this approach, because all too often, religious people try to put their religiosity on public display by following rituals and ceremonies zealously while otherwise living a life that is far from the teachings of the religion they hold so dear. Erasmus instead focuses on daily life and the teachings of Christianity when looked at as a school of philosophy.

The second thing that I found intriguing about the text is that the 22 lessons in it can easily be translated into 22 lessons for investors and what it means to be a good or virtuous investor. And this is what started me on this path. In this post, I will enumerate the 22 lessons for the virtuous investor as derived from Erasmus’ manual. Over the coming weeks, I will dive deeper into each of the 22 rules and explain what these rules mean for investors, effectively creating a manual for the virtuous investor.

Thus, without further ado, here are the 22 rules of the virtuous investor:

  1. Fight the evil of ignorance – knowledge is the foundation of success

  2. Have confidence in your knowledge – even if it brings temporary losses

  3. Analyse your fears – they will lead you astray if they can

  4. Keep your goals always in sight – the virtuous investor dedicates all his efforts to his goals

  5. Do not get distracted – avoid the temptations of a materialistic world

  6. Ignore the judgement of others – the only thing that matters is you

  7. Practice – nobody is perfect, but we can strive to become better

  8. Don’t worry about temptations – start worrying if you think you have no temptation, because that is when you cannot distinguish good from evil

  9. Always be prepared for a fight – don’t let a calm world lull you in

  10. Laugh in the face of danger – keep a slogan for your encouragement

  11. Avoid the two biggest dangers – despondency and pride

  12. Turn your weaknesses into strengths – reinforce your virtues when tempted

  13. Treat each fight as if it were your last – because if you don’t, it could be

  14. Don’t let your virtues slip – just because you are doing good, does not mean you can get away with some vices

  15. Don’t go for short-term gain – Weigh long-term outcomes with short-term results

  16. Never give up – the world may look bleak at times but you can recover

  17. Always have a plan – it is your most effective weapon

  18. Stop worrying about trifling matters – some things are just not worth the fight

  19. Be an example – what would others think of your behaviour?

  20. Virtue has its own rewards – only the virtuous investor will get to know these rewards

  21. Life is short – make it count for something

  22. Admit your faults – those who don’t, have the most to fear

Source: Metropolitan Museum of Art