7: Vitaliy Katsenelson on Soul in the Game

Do you have “Soul in the Game”? Whether you’re looking at your profession, your hobby, or your impact, is your soul in it? In today’s episode, Vitaliy Katsenelson joins us to share exactly what it means to have soul in the game and how this phrase became the title of his book. Listen in as we discuss family, stoicism, and decision fatigue as he shares in his book, Soul in the Game.

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Get to Know Vitaliy

Vitaliy was born in Murmansk, Russia, then immigrated to the United States in 1991. He received his undergraduate and graduate degrees from UC Denver. While there, he explored six or seven different majors, then stumbled into investing. He ended up getting a job at an investment firm because he was good with computers. While he was working there, he was also taking finance classes that he enjoyed, so he found himself talking to portfolio managers at his company.

Once he realized that he wanted to become an investor in his 20’s, he declared his major and got his CFA. He attributes a little bit of this to luck in that he stumbled into it without a plan to explore finance, but as an investor, he has soul in the game.

Soul in the Game

When Vitaliy began writing his book, there was one chapter that resonated so well with him that he decided to name the entire book after it, Soul in the Game. But, what is soul and what is the game? Well, it does involve a little luck in finding something you’re passionate about, similar to his own luck in stumbling into finance and investing.

The game is what you spend a large portion of your time doing—your occupation, your hobbies, or something that has an impact on other people. For Vitaliy, his own games are investing, writing , and being a parent. Having soul in the game means you have your whole identity tied to the game. When every single ounce of you is poured into that identity, you will never compromise on quality.

In the investing world, we often hear the phrase “skin in the game,” but this takes it a step further. Soul in the game is being passionate about your pursuit.

To have soul in the game, you have to have a love for what you do. When you have a passion and a love for what you do, people see it.

One beautiful thing that Vitaliy does in his profession is send out an investment letter that includes a painting by his father. He and his father became extremely close after his mother passed away from brain cancer when he was young. When they first moved to the United States, his father’s English wasn’t good enough to continue a career in teaching, so he pursued his hobby of painting and became a full-time artist, selling his paintings to earn a living.

When Vitaliy first began writing newsletters and articles to send out to friends, he would include his father’s paintings in them. The first time he didn’t, he received a response that he should always include them. Since then, he’s always included either his father’s or brother’s paintings.

Involving Your Children in Your Career

In his book, Vitaliy talks about investing, but also how it intertwines with being a parent. Becoming a parent is the biggest investment you’ll make in your life, as it will make you more mindful and grateful in providing a new perspective.

While it can be easy for investors to hope for their children to go into investing, that’s not always going to be the case. To instill this idea into his oldest, he would bring him to lectures and the Berkshire Hathaway annual meeting. Despite his efforts, his son had zero interest in investing, at the time. Vitaliy believes that the only way any parent should approach this is to want happiness for your child—if that doesn’t include investing, then it will include something else.

Shockingly, while at university, his son took an accounting and investing class. He tried to not enjoy it, yet found his way into the profession.

Stoicism

Another important topic that Vitaliy discusses in the book is stoicism and stoic philosophy. Stoicism is a philosophy that is over 2000 years old and is divided into three pillars:Ethics, logic and physics. Essentially some things are up to us and some things are not.. Stoics believe we must separate things that are within our control from things that are not.

When you look at the dichotomy of control, you realize that you have so little control over things, which makes you begin looking at things differently.

When we are born, we are basically born with hardware and software, making up our own kind of operating system. The software is essentially a blank slate that is influenced by experiences and people around us.

Stoic philosophy provides a well-organized operating system that can help you go through life and minimize negative emotions, increasing the quality of your life. One way to practice stoicism in your life is to push yourself through the uncomfortable things.

The Impact Stoicism has on Investment Strategies

Stoicism teaches you to focus on the important things, the things you have control over. As an investor, we have control over our resource process, but no control over how the market moves and prices stocks.

Stoic philosophy is a practice. You have to take control of how you take in negativity and things you have no control over, along with how you react to those things.

Quality in Scarcity

Each year, Vitaliy joins a group of value investors on a ski trip, which offers connection and conversation with like-minded peers. On these trips, like any other trip Vitaliy takes, he gets to enjoy the idea of quality in scarcity. Why, you ask?

These ski trips also allow for him to ignore his rule of no desserts. In the book, Vitaliy shares his decision to enforce self-control with desserts. When he’s at home, he doesn’t eat desserts, flour products, or red meat. However, outside of his home city, there are no restrictions. This happens for about 1 month out of the year.

He approaches life this way, because he believes there is quality in scarcity. When he doesn’t have ice cream as often as he would love, it means he can enjoy it so much more.

When he’s home in Denver, he’s a person who just doesn’t eat dessert. It is a “non-decision” decision. If you limit the amount of decisions you have to make, the more will power you have. Having these non-decision ideas in place gives him the discipline to not make inappropriate decisions in all areas of life, including investing.

This approach is simply Vitaliy’s way of approaching things. In his book he highlights that his way may not be the best for everyone, but it is a concept to consider.

Sign Up for Vitaliy’s Investment Letter

A beautiful thing that Vitaliy does in his profession is send out an investment letter that includes a painting by his father. He and his father became extremely close after his mother passed away from brain cancer when he was young. When they first moved to the United States, his father’s English wasn’t good enough to continue a career in teaching, so he pursued his hobby of painting and became a full-time artist, selling his paintings to earn a living.

When Vitaliy first began writing newsletters and articles to send out to friends, he would include his father’s paintings in them. The first time he didn’t, he got a response that he should always include them. So since then, he’s always included either his father’s or brother’s paintings.

Meet Vitaliy:

Vitaliy Katsenelson was born in Murmansk, USSR, and immigrated to the United States with his family in 1991. After joining Denver-based value investment firm IMA in 1997, Vitaliy became Chief Investment Officer in 2007, and CEO in 2012. Vitaliy has written two books on investing and is an award-winning writer. Known for his uncommon common sense, Forbes Magazine called him “The New Benjamin Graham.”

He’s written for publications including Financial Times, Barron’s, Institutional Investor and Foreign Policy. His articles are also published on his website, ContrarianEdge, and in audio format on his Intellectual Investor Podcast. Vitaliy lives in Denver with his wife and three kids, where he loves to read, listen to classical music, play chess, and write about life, investing and music. Soul in the Game is his third book, and first non-investing book.

Connect with Vitaliy:

Mentioned in this Episode:

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