When it comes to Buddhism and stock investment, most people will consider these two as opposing concepts. In today’s world, Buddhism is almost synonymous with meditation, imposing no harm on others, and a desireless state, while stock investment is associated with greed, zero-sum competitions, and achieving maximum returns. However, if one investigates further into these two concepts, surprising resemblances between them start to emerge.
In Buddhism, one of the most important concepts is Alaya (阿赖耶识), the seed that encompasses one’s virtues and sins from previous lives and translates them to good and bad consequences for one’s current and future lives. Alaya is the absolute reality championed by some western philosophers, who venture that this reality in itself is unaffected by the perception or knowledge of any finite being. Alaya is the only thing in our world that does not follow the law of birth and death (生灭法), and it is the only thing that truly exists. It does not decrease or increase (不增不减), just like the concept of energy conservation in physics. It is neither pure nor dirty (不垢不净), for one’s virtues and sins are both stored in it. Our physical surroundings, such as mountains and rivers, our emotions, such as love and hatred, and our physical feelings, such as comfort and pain, are merely our own Alayas’ projections. They come and go in our lives, for mountains can be removed, rivers can be drained, love can be exhausted, hatred can be dissolved, comfort can be depleted, and pain can be eased. These mundane elements all follow the law of birth and death, and they can all be a source of human suffering. Therefore, Alaya does not equal to these mundane elements, but since Alaya also contain these elements, they are not heterogenous to Alaya either (非一非异). From the Buddhist perspective, to free oneself from suffering and the law of birth and death, the only possible way is to find one’s own Alaya. Through meticulous studying of Buddhist classics and incessant practicing of Buddhist principles, one will first agree with the true existence of Alaya, then strive to seek for its existence, and may eventually find his or her own Alaya.
At first glance, none of the aspects of Buddhism is related to stock investment. Nevertheless, they do share some curious similarities. For stock investment, everything revolves around intrinsic value. Warren Buffett defines intrinsic value as “[the] value which is determined by the facts.” These facts include a company’s assets, earnings and dividends, and any future definite prospects, all of which make a company’s intrinsic value relatively stable in the long term. Similar to Alaya, each stock’s intrinsic value tends not to follow the law of birth and death because it does not suddenly decrease or increase due to some market pessimism or exuberance. On the other hand, market value often gyrates far above and below a company’s intrinsic value. As Benjamin Graham eloquently concluded, “Stocks have an investment characteristic and a speculative characteristic, and the latter is a consequence of human fear and greed.” Carefully searching for the intrinsic value is consistent with the investment characteristic, and being blindly influenced by market value corresponds to the speculative characteristic. Hence, just like the relationship between Alaya and our world’s mundane elements, intrinsic value does not equate to market value, but since market value converges to intrinsic value in the long term, they are not heterogenous either. To distance themselves from the speculative characteristic of stocks, investors must carefully study the fundamentals of their stock’s underlying company. They must thoroughly research the company’s assets and liabilities, dividend policy, management’s capability and reliability, relationship with shareholders and stakeholders, product line, and so on. They also need to repudiate themselves with fickle market movements and superficial emotions. These procedures to find intrinsic value are truly similar to the Buddhist doctrines to discover Alaya. The essence of intrinsic value truly resembles the essence of Alaya.