Find the Torture You’re Comfortable With

I have a lot of unread books on my Kindle.

My reading process involves a tight stop-loss if I’m just not into something.

That leaves a lot of books I own that will never get finished. Oh well, no reason to cry over sunk costs.

But there are other books I can occasionally return to and read little snippets or chapters here and there.

Jerry Seinfeld’s Is This Anything? is one of those books. Seinfeld has kept notebooks filled with all of his jokes over the decades and decided to put them all into a single book.

Here is one of my favorites:

Something happens when a man reaches a certain age that The News becomes the most important thing in his life.

I remember when it happened to my father.

All fathers think one day they’re going to get a call from the State Department.

“Listen, we’ve completely lost track of the situation in the Middle East. You’ve been watching the news. What do you think we should do about it?”


This one too:

I’ll tell you what I like about Chinese people. They’re really hanging in there with the chopsticks. Obviously, they’ve seen the fork… But they’re, “Yes, very nice. But we’re staying with the sticks.” I don’t know how they missed it. Chinese farmers working in the field with a shovel all day. Shovel… spoon… come on. There it is. You’re not plowing 40 acres with a couple of pool cues.

It’s funny because it’s true.

It’s kind of hard to believe Seinfeld has been writing these kinds of jokes since the 1970s.

This week I came across this clip of Jerry talking about how he’s always in search of material for his next joke in an interview with Howard Stern:

My favorite part is when Stern says it sounds like a tortured existence to be constantly looking for material in every daily interaction.

I love Seinfeld’s response: “Your blessing in life is when you find the torture you’re comfortable with.”

He says it’s the same thing to marriage, kids, working out, dieting, etc.

Seinfeld’s jokes are funny because they’re true and the same seems to apply to his wisdom. He’s right.

This idea applies to investing as well.

There is no perfect position or asset allocation when it comes to building your portfolio.

Take too much risk and you give yourself the potential for higher expected returns in exchange for increased volatility and extreme drawdowns.

Take less risk and you give yourself the potential for lower expected returns in exchange for less volatility and extreme drawdowns.

Risk never really goes away, it just sort of changes shape depending on your stance. Every asset allocation leads to a tortured existence at some point depending on the environment.

Personally, I’ve always been comfortable taking on a lot of equity risk. My retirement savings are basically 100% allocated to equities.

I’ve held this same allocation through the 2008 crash, the 2020 Covid crash and the 2022 inflation-induced bear market. I’m still a net saver and have a high tolerance for risk so I don’t mind the occasional torture chamber stocks put you in from time to time.

I’m willing to accept short-run volatility for better long-run returns. That could change in the future. When I get older and have more money invested in the stock market and not as much human capital remaining my appetite for risk could change.

I’ll always have the majority of my portfolio invested in stocks but I can envision a day when the torture I’m more comfortable with is holding a higher allocation to short-term bonds and cash rather than having the vast majority of my portfolio in stocks.

Jonathan Clements has a new book out called My Money Journey in which 30 people share how they achieved financial freedom.

William Bernstein shares how his experience with the 1987 crash early in his investing lifecycle has shaped how he allocates his money now that he’s in his 70s:

I often tell people that, when you’ve won the game, stop playing with the money you really need. Perhaps all would be fine if I kept 100% in stocks. But I’m now in my 70s and more interested in financial survival, which is why today I keep at least 20 years of living expenses in bonds and cash investments. That won’t make me rich. Instead, I’ve done something more important: minimized my odds of dying poor.

The torture he is more comfortable with is holding a higher allocation to short-duration assets even though it means lower returns on his portfolio.

When it comes to investing or most aspects of life, it’s really about picking your poison.

Much like Seinfeld, you just have to find the torture you love.

Further Reading:
The Mental Accounting of Asset Allocation