Seneca says: Avoid the crowd

March 17, 2016 | Kara Lilly Print

I had the chance to re-read one of my favourite books in recent weeks: Seneca’s Letters from a Stoic. Seneca was a Roman Stoic, philosopher, statesman, and advisor to Emperor Nero. He is a fascinating historical figure, known both for his views on stoicism—immortalized in a series of letters to his friend, Lucius—as well as his melodramatic fate: he was forced to commit suicide for his alleged complicity in the Pisonian conspiracy to assassinate Nero.

Bust of Seneca - Credit: Wellcome Library, London. Wellcome Images

Two thousand years later, many of Seneca’s ideas still provide readers with relevant and practical life lessons. However, there is one lesson that is particularly relevant to investors in the current investment environment; namely, the danger of the crowd.

Seneca explains his concern in Letter VII. “You ask me to say what is particularly important to avoid. My answer is this: a mass crowd. It is something to which you cannot entrust yourself yet without risk.”

To Seneca, the individual who sought to live a pious life risked much by associating with the crowd. He believed that the contagious emotions of the crowd tempted individuals to be self-indulgent and self-serving. In fact, Seneca attributed such power to the influence of crowds that he believed anyone, even a great man, to be susceptible. “A Socrates, a Cato or a Laelius,” he wrote, “might have been shaken in his principles by a multitude of people different from himself.”

These reflections are relevant to investors. Not only must we cope with our own emotions, we need to avoid catching the emotions of others. This is hard given our biological hardwiring and the constant exposure we face, whether it’s reading news stories or talking with our zealous brother-in-law at the dinner table.

So how did Seneca advise dealing with the crowd? In his estimation, it was best to “neither hate nor imitate the world.” Instead he advised to “shun both courses: you should neither become like the bad because they are many, nor be the enemy of the many because they are unlike you.” Retire into yourself, he said. In other words, Seneca argued that while you can’t fully ignore the crowd, you can avoid unnecessary exposure to it. And doing so allows you to research and form your own view, first.

In practice, our team uses a number of strategies to block or detach from emotional exposure. These strategies include:

1. Avoid short-term noise as much as possible, while paying more attention to information sources that emphasize long-term perspectives. There is an immense array of information on investing out there…and you don’t need to read it all. Information that doesn’t benefit you is anything that doesn’t give you new insights while exposing you to the emotions of others.

2. Limit repeat exposure to the same signal. Once you’ve received a signal, it doesn’t make sense to keep exposing yourself to the same emotions that surround that signal. For example, it might make sense to read about the Greek crisis, but you don’t necessarily need to keep watching the same TV program about Greece over and over again.

3. Deliberately incorporate “pause time” into decision-making. When an event occurs, the first thing you want to do is pause. After that, it is critical not only to review the evidence, but to also become aware of your emotions in the situation. Awareness of how you feel is an important first step in detaching from the emotion of others.

4. About half of the members of the research team maintain a regular habit of meditation. Regular meditation has the potential to improve your awareness of your thoughts and emotions, while giving you some tools to regulate them.

All too often, when an event unfolds, we look to the masses for understanding without spending the necessary time to come to our own conclusions. Seneca would have us do the opposite; and more, he would have us keep the opinions and emotions of the crowd at arms’ length.


“When a mind is impressionable and has none too firm a hold on what is right, it must be rescued from the crowd; it is easy for it to go over to the majority.”



Tags: Seneca, Stoicism


  • Baily Seshagiri 17/03/2016 11:20am (5 years ago)

    Very interesting, but not that easy to emulate Seneca, in life or in investing. Thanks for the article.

  • Jim Ashwood 17/03/2016 12:21pm (5 years ago)

    Very true rational from Seneca. It does make sense to me. But in the investment world it is very hard to follow,especially with new investors. The "crowd" in this case is the unreal amount of internet and t.v. people that talk finances. Soooo many different opinions about how to manage your portfolio. It must be very difficult for you to keep investors from panic with all these ''experts" that know what is coming next. If they only knew that Seneca is right on

  • Ed 17/03/2016 12:29pm (5 years ago)

    Thank you. Great advice. Useful for parenting.

  • Valerie 17/03/2016 2:53pm (5 years ago)

    Thank you for this thoughtful piece. I'm impressed that half of your research team uses meditation to stay chill.

  • Zi 17/03/2016 3:30pm (5 years ago)

    Would be interested in learning more about your meditation resources. I too meditate and find it almost more important than my physical exercise routine. Great blog!!

    • Kara Lilly 18/03/2016 11:18am (5 years ago)

      Stay tuned for more thoughts on the meditation front. It rolls up into a bigger topic in which we have a lot of interest... Learning how to respond and not react.

  • Mike 17/03/2016 6:34pm (5 years ago)

    Hi Kara. Thank you for another great article.

  • Ian Fraser 19/03/2016 3:42pm (5 years ago)

    Excellent piece Kara. One of your best. Keep up the good work...and the meditation!

  • Joey Stewart 20/03/2016 11:43am (5 years ago)

    I love your ability to find wisdom in obscure places and thread the ideas, not only to investing but to life. Thank you - You have a beautiful mind!

  • Shaun 22/03/2016 12:44pm (4 years ago)

    There is much to like about Mawer funds:
    - low MER
    - low turnover and TER
    - long term approach
    - not publicly traded
    - recent outperformance

    I have been an owner of several Mawer funds for many years. However, the secret is out and the flood gates have opened. Mawer is taking on new investment dollars at an unpredidented rate for it's history. This too is a form of following the crowd. Personally I am beginning to worry how Mawer will be able to cope with such large amounts of assets under management.

    There is much academic research to support that it becomes ever more difficult for funds to outperform their peers and benchmarks as they take on ever more assets, particularly when they exceed about 1B. The reasons for this include higher market impact costs of trading small companies, limited ability of have significant % holdings of small companies because there are not enough shares available, and scope creep of having to diversify away best ideas and trending towards larger cap stocks.

    Currently all the Mawer funds have over a billion is assets, the largets beign the international fund now with well over 4B. This is relatively new territory for Mawer and in stark contrast to what the firm was managing a decade ago.

    The article linked below from Morningstar quotes the Martin Ferguson (former award winning manager of the Mawer New Canada Fund), explaining why Mawer chose to close the fund. “We continued to grow to a point where we said we can’t take on any more money because it just gets incrementally hard with each additional dollar brought into the mandate to do the best that we can for clients.”

    Mawer closed the A series fund to the public in 2005 when the total assets were around $270M. But Mawer New Canada is still available through the balanced fund and the institutional O series is also still selling. So despite being closed it has grown to $1B under management today.

    I would be interested to hear how Mawer plans to deal with taking on so much investment dollars efficiently where so many other firms have failed in the past.


    • Robert Rosenberg 29/03/2016 5:06pm (4 years ago)

      Also a long-time owner of Mawer funds and share the same concerns.
      On the other hand I do appreciate Kara's detailed insights in this blog.

  • Richard Stott 30/03/2016 5:50am (4 years ago)

    Great article. I'm currently listening to 'The Obstacle is the Way' by Ryan Holliday which draws a lot on stoicism and brings it into the modern day.

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