The Importance of Philosophy in Investing

In my previous post, I discussed the the importance of history in investing This time, I want to talk about another vital pillar that is equally crucial yet often overlooked: philosophy.

When people hear the word "philosophy," they often dismiss it as an abstract, overly idealistic discipline detached from reality. To be frank, studying the teachings of Plato or Socrates and trying to connect them directly to the stock market might seem downright bizarre at first glance.

However, I firmly believe that the wisdom of great philosophers helps us become better investors than anyone else. There are two major reasons for this.

1. Philosophy Shapes the World We Inhabit

The first reason is that philosophers are the ones who shaped—and continue to shape—our world. Though they have long since passed, their ideas have remained alive since antiquity, constantly evolving and defining the collective spirit of human society.

In his book The Worldly Philosophers, Robert Heilbroner beautifully captures this exact reality:

“And because he who enlists a man’s mind wields a power even greater than the sword or the scepter, these men shaped and swayed the world.”

In other words, whether we realize it or not, everything we experience today contains at least a small fragment of the thoughts left behind by great minds like Socrates, Plato, and Kant.

Everyone has different approaches, but I believe it is essential to study the "roots." In my previous post regarding the importance of social sciences, I referenced Karl Polanyi’s The Great Transformation to emphasize why we must study social science—the discipline that investigates society, the foundation of our world.

If social science studies the root of the physical world, philosophy studies the root of the mental world. The rigorous contemplation, intense questioning, and deep analyses of philosophers are embedded in every corner of our lives. Therefore, studying philosophy means studying the very origin of the world. Given that the stock market is ultimately just another extension of this world, studying philosophy is equivalent to studying the fundamental roots of stock investing. This is precisely why reading philosophy books is an absolute necessity for an investor.

2. Standing on the Shoulders of Giants

The second reason is simple: philosophers are vastly smarter than we are. Let's think about it in straightforward terms: Who is smarter, Plato or me? The answer to this question is predetermined.

If that is the case, it is undeniably more rational to invest by aligning our views with Plato—a giant whose intellect cannot even be adequately described by the word "smart" because he is a great philosopher—rather than relying solely on our own limited thoughts.

Furthermore, Plato is not the only philosopher at our disposal. The history of human thought is filled with brilliant minds. When you look at it this way, you realize you are never investing alone. By opening a book, you are effectively sitting down at the trading desk with the likes of Plato, Socrates, Democritus, Kant, Hegel, and Wittgenstein right by your side. Guided by their collective wisdom, what is there to fear in the stock market—or anywhere else?

Conclusion

When stated abstractly, this concept might still feel a bit disconnected from practical trading. That is why in my next post, I intend to share a brief, practical guide on how I personally read philosophy books and translate those insights into real-world stock investing.

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