The Power of Negative Thinking

Obviously, I’m trolling. Negative thinking will get you nowhere. If you believe that you will fail, you will probably fail. If you believe that you will succeed, you have a good chance of succeeding. I have known some negative thinkers in my life, and they weren’t able to accomplish much. You can’t be a pessimist and start a hedge fund. You can’t be a pessimist and start a business. If you are to take risks, you must be an optimist.

But some people…take it too far? There is a bit of a positive thinking cult in the United States (and yes, it is specific to the United States). Copious books, seminars, newsletters, all telling you the same thing: “Watch your thoughts, they become your words; watch your words, they become your actions; watch your actions, they become your habits; watch your habits, they become your character; watch your character, it becomes your destiny.” Lao Tzu, of course. So the logic dictates that if you think negative thoughts you will do negative things. I thought we debunked this. In the 1980s, anti-porn crusaders said that pornography would be responsible for men going out and molesting women. If anything, the opposite has happened—men who watch pornography don’t want much to do with real women at all. The thoughts didn’t become the actions.

I don’t find much of a nexus between thoughts and actions. If you talk to a good psychotherapist, they will tell you that you are not responsible for your thoughts. Thoughts flash in and out of your mind all day, on a daily basis. I’ll tell you what, if I were responsible for my thoughts, I’d be doing consecutive life sentences. We all would. So no, you cannot control your thoughts. And if you are undertaking a venture, and you have doubts that you will succeed in this venture, and you immediately dismiss the doubts and try to think “positive thoughts,” you will be significantly worse off. The goal isn’t to dismiss or to ignore the doubts, but to use them as fuel for motivation. If you go into a high-risk transaction, and you blithely believe that everything will be great, then you will be underprepared. This goes for artistic performance as well as athletics as well as business.

I’m referring to a certain class of person who is optimistic all the time. Everything is awesome—even when things aren’t awesome. I’m sure you know the type—someone you know well is constantly posting happy family photos on Facebook. Meanwhile, there is drug addiction, infidelity, mental illness, alcoholism, domestic violence, and more—but everything is awesome. I’m sure you know someone who tells you about all their winning trades—but you dig a little deeper and you find out that they were down 30% last year. Or the restaurant business is better than ever, they are crushing it—and then six months later they are tango uniform. Some of this is keeping up appearances, which is natural—we try to present our best selves to the world, and certainly, you don’t want to go on Facebook and air your grievances. But oftentimes it is optimism taken to the point of delusion. Things really are terrible, and they refuse to acknowledge it. Why is this bad? Because if you don’t acknowledge it, you can’t fix it.

About six months ago, I got into a tiff with a guy on Twitter who is an optimist—everything is awesome, all the time—to the point where I was a little creeped out; it was borderline insanity. He was always in my mentions: “Dude, you’re so negative. Dude, you’re so negative.” Let’s be clear—you don’t accomplish what I’ve accomplished by being a pessimist. I’m not negative. But if something sucks, I say it sucks, and I get around to fixing it. I insulted him and he blocked me. A few weeks later, I read The Subtle Art of not Giving a Fuck by Mark Manson, and there was an entire page devoted to this type of individual. I thought about reproducing it here, but Manson is such an awful writer that it would pollute the prose. But he said the same thing that I did—if you’re part of the positive thinking cult, you’re sitting in denial aisle. I’m sure many of you have read Victor Frankl. Victor Frankl wasn’t sitting in Dachau saying, This is awesome, we’re crushing it! What Frankl said was that we get to choose our response to any situation, no matter how horrible it is. He chose to be optimistic and cheerful, while also acknowledging that he was in a damn concentration camp. There is a crucial difference between saying everything is awesome and this is tough, but we’ll get through it. If you don’t acknowledge that there is a problem, then you can’t solve the problem. And what I’ve found with the positive thinking crowd is that the problems tend to pile up, because they refuse to acknowledge them—they can’t entertain those pesky negative thoughts. I’ll go further and say that the perennial positive thinkers are frequently, deep down, some of the unhappiest people you will meet.

If you look at the world’s most successful people—Bezos, Buffett, Musk—I wouldn’t characterize them as positive thinkers. All optimists, but all capable of being pretty grim guys. If you are a positive thinker in the investment world, you will get fucking obliterated. Now, any time I put on a trade, any trade, I always think it will be a winner. I don’t put on trades thinking that they will be losers (unless you count option spreads, where one leg will probably lose money). But if you’ve read too much positive thinking literature, you won’t take action when the market moves against you. Down 10%? Doing great! Down 20%, even better! Let’s think positive—the market will come back! Negative thinking gets you nowhere! You know how that works out: pitiful and incomprehensible demoralization. The stock is down 90% from the highs—on the comeback trail! Positive thinking makes you undisciplined about losses. A realistic optimist would experience a 3% loss, look at the chart, say, “Uh-oh, this looks like trouble,” and cut the position. As they like to say in the business, hope is not a strategy. Traders, by the way, especially the good ones, are some of the most cynical people you will ever meet. And you have to be, to operate in the stock market. Everyone is a turd until they prove otherwise—this is just prudent risk management.

Not that there aren’t benefits to positive thinking. Professional athletes will use visualization techniques. They will envision hitting that game-winning home run. They will envision making that perfect triple axel. Believe it or not, when I was drum major of the marching band in high school, I used to visualize the perfect performance. One of my favorite stories from Moneyball (the book, not the movie) was about Lenny Dykstra. Dykstra was literally too dumb to even consider that he could fail. Steve Carlton? Second-most strikeouts of all time? I’m going to stick that geezer. He had no fear whatsoever. And if you’re a Yankees fan, like me, you remember the A-Rod days where he’d stand in the batter’s box and look at the mound and you could see it in his eyes—fail, fail, fail. And failure absolutely is an option. You can believe that you will succeed, while acknowledging that even if you do your best, the outcome is not up to you.

We all have low points in our lives. I’ve certainly had my share. If you have a drinking problem, pretty much the first step in doing something about your drinking problem is acknowledging that you have a problem. In fact, pretty much all your real problems arise when you minimize the problem. Puke down your shirt on the subway? Ah, we’ve all been there. Tie one on and back into a telephone pole? It could happen to anyone. Everything’s under control. Nothing to worry about here. In every 12-step program in existence, the first step is to say, this sucks, and I’m going to do something about it. It was the denial and delusion that you could control your drinking that got you to this point. Let me be clear—no amount of “positive” thinking is going to save you from addictive or compulsive behavior. Or most forms of heritable or non-heritable mental illness. Or any unwanted behavior whatsoever. The first step is to admit that there is a problem. But if you’re an air quotes “positive thinker,” you will never acknowledge that there is a problem. You have to be able to say the two magic words: this sucks. By the way, that’s what the Stoics do. They focus on what's within our control and accepting what's not, fostering resilience and emotional stability by reframing challenges as opportunities for growth.

We all want to be happy. I have written about how to be happy a bunch of times before. This is how you get happy: you do esteemable acts, and the byproduct is self-esteem. You cannot think or wish your way into being happy by memory-holing negative thoughts. Yes, happiness is a choice, but not in the way that people think it is. It requires action, over an accumulation of weeks, months, and years. This isn’t The Music Man. We’re not using the Think System.