While filming ‘Walk the Line’, the biopic about American country music star Johnny Cash, Joaquin Phoenix bewildered audiences when he actually learned to play the guitar and sing in his character’s deep, calm, bass-baritone voice. When filming the emotionally wounded and dangerously psychotic villain Commodus in The Gladiator, Joaquin carried a sword around with him everywhere, whether on or off set.
Phoenix is an aficionado of ‘method acting’, a dramatic technique in which actors try to identify as closely as possible with the character played. Possibly the most extreme case is Daniel Day-Lewis during the filming of the movie My Left Foot - where he played a man (Christy Brown) with cerebral palsy. He insisted on using a wheelchair at all times on set and for his meals to be spoon fed to him - just as Christy Brown had to during his life. Lewis’s obsession clearly paid off as he went on to win the Oscar for Best Actor in a Leading Role at the 1990 Academy Awards.
Method acting can be traced as far back as the early 20th century, to the ideas of Constantin Stanislavski, who developed his thinking from his time at the Moscow Art Theatre. Stanislavski set out to convey the ‘truth’ through a more human system of acting. His approach is noted for its holistic and psychophysical nature, which explores the character and his or her actions both from ‘inside out’ and ‘outside in’.
What does any of this have to do with business or investing? To fully understand a business, one must become equally as immersed in every fibre of the organization and understand it ‘inside out’ and ‘outside in’ - just as the method actor understands the character he has essentially become.
Some of the best investors and serial entrepreneurs, I would argue, have to ‘go into character’ as they explore new ventures in sectors they are unfamiliar with. Having focused my earlier investments in the traditional property sector, when I started to explore the ‘PropTech’ space in 2013, it felt like I had to practise for a new acting role. I had to learn to dress differently; off came the personally tailored, Mayfair-inspired three-piece suits, and on came the skinny jeans and fitted blazers. I had to learn a new jargon, and even alter my writing style (there’s apparently an abbreviation for everything in tech circles). I spent hours loitering at hipster-filled cafes on the East end to culturally assimilate.
I have had to aggressively network my way into new sectors I hitherto knew nothing about, learn the cultural nuances, adopt the business traditions, and get intimately familiar with the risks and how to overcome them. I have had to essentially ‘catch up’ with everyone else in the sectors I target and play the role as if I had been doing it all my life.
‘Method investing’, as I like to call it, has slowly and iteratively evolved into my current investing style – I dig deep and virtually ‘go into character’ with each new venture I look into. This is the only way I can be sure that the business and sector I’m deep-diving into is one I want to be in, and if so, that I can actually add value. In fact, method investing has become something I can replicate across any new sector I explore. Recently, I’ve been spending quite a bit of time investigating a new real estate venture related to West Africa. Applying my method to a region I see as a bastion of growth in an otherwise slowing global economy is taking me through all sorts of new and exciting adventures.
Not for the Faint Hearted
Method investing is not for the faint-hearted or the conventional, risk-averse investor who sticks to the sectors he or she knows. It is for the bold and buccaneering. It is for those whose ancestors were the gold seekers that ventured out West in 1849 during the Californian Gold Rush. It is for the Daniel Day-Lewis of investors and entrepreneurs, who is not afraid (no matter how discomforting) to try new roles - in new businesses, in new sectors, in new regions – that they know nothing about.
Method investing is a natural fit for the more entrepreneurial investors, those that themselves have been on the other side, have had to ‘create something from nothing’, and know what it means to ‘hustle’ during the tumultuous early days of any new business. It is for the dynamic thinkers who can connect the dots between seemingly unrelated ideas, sectors, and regions. It is for the passionate and the borderline obsessive amongst us.
A method as concentrated as ‘method investing’ must come with its own health warning – a dose of reason and common sense is needed to temper the passion. Unbridled passion when investing could lead to a deep, dark hole financially. We need to be passionate about the business but never emotional in our decision-making, a fine line that must be carefully balanced by a skillful method investor. To avoid the downward spiral that destroyed some of the finest method actors, including Heath Ledger, our passion must be checked by temperance and rationality in approach in addition to meticulous research about the business we are evaluating.
The American fashion designer and film director Tom Ford recently admitted, ‘I probably do have an obsessive personality, but striving for perfection has served me well’. History has taught us that there is often a thin line between a madman and a genius, and visionaries with an obsession for their craft have often straddled both sides of that line. Isaac Newton broke new ground in physics in the eighteenth century, and Van Gogh did the same in post-Impressionist art a century later, but both spent prolonged periods suffering from mental health problems.
Many a master speaks of the feeling of complete immersion in a subject, and how this deep focus eventually leads to dynamic discovery. It is only when you truly understand something down to its most minute detail that you can use it to achieve something truly special. Method investing is no different, and those who adopt this approach are well placed to discover the next billion-dollar company. The challenge will be to maintain our sanity as we go through the uncertain, treacherous, pothole-infested journey until our life’s masterpiece is built.