Dante: Making It

Greed isn’t the only investment sin.

One of the pleasures of reading the classics is being reminded of things we know but can’t call to mind right away. Such is the cash with Dante’s Purgatory, the second, and perhaps least-read volume of his Divine Comedy. That’s a shame, because the Purgatory is filled with practical advice. The Inferno is peopled with folks Dante didn’t like, and Paradise is filled with saints and other heroes, but Purgatory seems to deal with the trials and troubles of today.

Central to this portion of the poem is the idea of sin—the seven deadly sins of medieval lore. Modern culture doesn’t like the moralistic overtones of the word, but the concept of sin is still accepted—thoughts and actions that harm ourselves or others. And in Dante the notion is more rich: sin is anything that keeps someone from reaching his or her full potential.

As Dante continues on his pilgrimage, he climbs a great mountain. To ascend, he passes through seven terraces, each of which is filled with people atoning for each of the seven deadly sins. Greed is there, to be sure, but so the six other classic foibles: pride, envy, wrath, sloth, gluttony, and lust. In this work the problems are more issues of motives than actions—how we think rather than what we do.

Similarly, there are classic errors investors fall into that cause them to fall short of their goals—failure to plan, not doing research, falling in love with a stock, overconfidence, following the herd, confirmation bias, and so on. Dante’s categories are a useful guide—they show us where we might be missing out, and what to do about it.

In Dante no one can fake it ‘till they make it. Actions (and thoughts) have consequences. If we apply his lessons to understand ourselves better, we come a long way towards winning the losers game.

Douglas R. Tengdin, CFA

Chief Investment Officer

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