Mindfulness and Buddhist Economics in the Financial Market: Generating Delta or Alpha?

Abstract

Financial market is undeniably the prime exemplar of capitalism where practitioners compete under intense pressure to excel in decision making every nanosecond. It is where competition, self-interest and profit maximization are most celebrated, causing significant and unsustainable volatility and stress at the individual, social, and environmental levels. Performance of practitioners in the financial market is measured not only in an absolute term, but also in a relative term—how they score relative to their peers and the benchmark market indexes. The outperformance Alpha is generated from the underlying market exposure Delta through the highest achievements in discipline, focus, and insight. This unrelenting pursuit of outperformance is not only constrained by factors such as time, social norms, moral codes, regulations, laws, but it is also limited by human physical and mental capacities to make decision based on technology and information available. While new technologies support transactions in higher frequency and volume, our mental capacities are increasingly overloaded by the enormous time, moral and financial pressure. This paper reviews the state of contemplative practices as a form of “mind technology” in the financial market. This mind technology—prominently known as the Mindfulness Movement over the last few decades—is now adopted by the financial market as a collective of secular and evidence-based techniques to reduce stress, reduce biases, increase productivity, increase attention, and so forth. In order to deliver outperformance Alpha in the market, this mind technology seems to suggest that it is important to engage in contemplative practices so that our brainwaves could transcend from the faster Gamma and Alpha waves to the slower and advance state of Delta waves and beyond. Focusing on the practitioners in the financial market and based on quantitative and qualitative data available, this research looks into the benefits of these contemplative practices, particularly in the areas of decision making and management. It then evaluates the potential integration and conflict between contemplative practices and material pursuits. The research argues that while contemplative practices are conducive to better decision making and management, they have not reached their full potential when being applied with an instrumental and materialistic mindset. With reference to studies in the field of Buddhist Economics, this research compares the Threefold Training in Buddhism (moral discipline, mental concentration, and wisdom) with contemplative practices in general and the Mindfulness Movement in particular. It explores the potential unique contribution of Buddhist Economics and offers some avenues for the modern mindfulness movement to rethink how we could develop our mental capacities to cope with the challenges we face living in the market economy.