024: Nighty, Night

Nighty, Night

Color Commentary

Table of Contents

1. It’s Nap Time
2. Sleep Deprivation
3. Joys of Abundance
4. Sleep Practice
5. Military Method
6. Let’s Get Practical

1. It’s Nap Time

This is an issue about sleep, so if it puts you to sleep, that’s fabulous. Take the opportunity. Enjoy it. When you wake up, come back and finish reading, because this sleep stuff is life-changing.

Focusing on my sleep is for my investing practice, yes, but also just for my life in general. For my energy. For my happiness. Wouldn’t you want something that does this?

“Scientists have discovered a revolutionary new treatment that makes you live longer. It enhances your memory and makes you more creative. It makes you look more attractive. It keeps you slim and lowers food cravings. It protects you from cancer and dementia. It wards off colds and the flu. It lowers your risk of heart attacks and stroke, not to mention diabetes. You’ll even feel happier, less depressed, and less anxious. Are you interested?” (Chapter 6 of Why We Sleep, p.107 on my Kindle edition.)

I AM interested. That paragraph is a fake ad that opens the chapter about the benefits of sleep, and it is from the excellent book Why We Sleep: Unlocking the Power of Sleep and Dreams, by Matthew Walker.

I realized my sleep and how much my not being so great at sleep might affect my investing decisions after I talked to a value investor called Vitaliy Katselnelson on the InvestED Podcast (Part I and Part II of my interview with Vitaliy). He referred me to that book, which he had been reading about sleep. Vitaliy was so pumped about it what he learned from this book, and had made such strange changes to his lifestyle pursuant to its recommendations, that I had to find out what he was talking about. Furthermore, he said something intriguing that stuck with me: investing is about creativity, and sleep directly affects creativity.

Can you remember when you last got enough sleep, so that you awoke feeling rested, refreshed, and most of all, creatively excited for everything you were going to face that day?

Two-thirds of adults in the developed world don’t get eight hours of sleep per night. I’d bet that us investors are amongst those. And yet we are the ones who would benefit heartily from starting the day with a clear brain, open to possibilities yet unknown. The treasure hunt that is investing practice is much more fun when you have the energy for the hunt.

Look at everything we squeeze in to a week, and we add investing practice on top of that. I often forgo what feels like “extra” sleep (I’ve learned now that it’s in no way extra) to read just one more article about the latest merger on Wall Street. I have always felt like taking that extra time is a decent choice. Sleep is negotiable, right?

It’s like a pass-fail exam: I want to do just enough to pass, but not more, because anything more is wasted energy. With sleep, I’ve always wanted to sleep just enough to do well the next day, but not more. Sleeping “extra” has felt like wasted time to me.

Well. I was wrong.

2. Sleep Deprivation

Getting just barely enough sleep means that I’m probably, actually, constantly sleep deprived. We all know the typical recommendation to get eight hours of sleep, and Why We Sleep recommends 7-9 hours for the average adult, but most of us don’t achieve that level on a regular basis. It’s biologically real, though. To discover if we really are wired for about eight hours of sleep, there were two sleep researchers back in 1938 who went to live in one of the world’s deepest caves past where light penetrates, where they would not be subject to the influence of the rhythm of the sun, to test how much sleep their bodies needed. These two guys lived deep in a cave, wearing measurement devices, sleeping on hospital beds elevated in buckets of water to deter the cave creatures from joining them in bed, for thirty-two days. No light, for thirty-two days.

Still, even without the sun, their sleep and wake cycles proved that they naturally were awake for about fifteen hours and then slept for about nine hours. Interestingly, however, the longer they were in the cave, their overall cycles lengthened. The younger one had a 26 to 28 hour cycle, and the older one was a bit longer than 24 hours.

The results prove that humans are naturally on a cycle of slightly longer than 24 hours. This is why our sleep-wake rhythm is called a “circadian” rhythm – circa, or approximately, one day in length, rather than exactly one day in length.

Our circadian rhythm is also the reason that we have to constantly reset ourselves to the 24 hour clock set by the sun. Our brains respond to the daylight as a cue to know when to release sleep and wake chemicals at the time we need them, as well as other stimulants such as social interaction and exercise. We are always resetting our clocks, little by little.

(There’s also a completely separate cycle of the build-up of sleep pressure that I talk about on the audio for this issue – the sleep pressure in the brain can only be relieved by sleep. These two separate cycles, if in harmony, help us go to sleep easily. If they’re divergent, due to jet lag or working a night shift, for example, it can make getting good sleep quite tough.)

The amount of sleep we humans need changes over the course of our life, and so does the timing of our sleep. At about 9pm, when a small child would be quite sleepy, a sixteen-year-old’s brain is actually at peak wakefulness. The melatonin hormone that signals the brain it is time to start heading towards sleep is still several hours away from being released. Early start times for high school, when teenagers are physically wired to still be asleep, contribute to an epidemic of sleep-deprived kids. It’s literally their biological hard-wiring, but because we don’t understand it, we create problems. Not understanding of this physiological fact has caused legions of fights between parents and their teenagers.

Adults, by contrast, tend to get sleepy around 10pm (through with wide variations, depending on if you’re a night or morning person) and older adults tend towards falling asleep even earlier (and wake up earlier and earlier). Understanding the sleep tendencies of ourselves and our families members can go a long way to harmony in the family, and harmony within ourselves.

Why would we have all these different sorts of sleep rhythms? The author posits a theory that evolution as small bands of prehistoric people led us to protect ourselves with such differing sleep needs and sleep timing. If the entire group was asleep at the same time, it was unprotected. However, by staggering sleep times, a band was only without a watchman for a few hours in the middle of the night. If the elders and kids went to sleep soon after it got dark, and the adults went to sleep a few hours later, the teenagers were still awake to guard the group in the late night hours. Having a few hours of responsibility perhaps was a way for them to start to feel the independence of being an adult and allow the parents some much-needed rest. Of course, now, with all of us expected to be on regular clock schedules and standardized sleeping hours, we’ve lost the benefit of having divergent sleep schedules.

Conversely, wanting more sleep but not being able to fall asleep or stay asleep is a common complaint as we get older. A key takeaway for me from this book is that the lack of sleep as we get older might be a cause of considerable health problems and diseases. While older adults do tend to sleep less, it’s not because they don’t need the sleep. In fact, they do need it. As we age and get less and less time in the deepest sleep state, which restores our brains, we suffer physical repercussions from the lack of sleep.

The author writes: “This is an important point: it means that elderly individuals fail to connect their deterioration in health with their deterioration in sleep, despite causal links between the two having been known to scientists for many decades. Seniors therefore complain about and seek treatment for their health issues when visiting their GP, but rarely ask for help with their equally problematic sleep issues.” (Chapter 5 of Why We Sleep, p.96 on my Kindle edition.)

Therefore, as we get older and want to stay mentally sharp and physically healthy and energetic, it is only more important to do everything possible to obtain good quality sleep. I often wake up and feel a bit angry at myself for not going to bed earlier and feeling so tired. Since understanding my circadian rhythm better, I can see my faulty pattern when I fight my biological rhythm. It’s turned sleeping into a fact-based observation for me, rather than what feels like a constant cycle of neediness.

3. Joys of Abundance

Back to that fake ad I put at the beginning of this issue for a miracle treatment that basically fixes, well, EVERYTHING. Makes you look better, helps you diet, relieves depression, protects you from cancer and dementia, helps your memory and cognition, and even makes you happier. The benefits of an abundance of sleep are pretty much everything that we want, and numerous. I’ll recount one particular example about improving memory from the book that stuck with me (I must have slept on it…). I’ve found that quick recall is a really useful skill as an investor. When I can quickly call up in my mind whether I’ve already reviewed a company, whether I’ve ever heard of the management, and what my opinion of both were, it saves me a lot of time looking up my notes. When I can connect the dots between new information and something I read the year before, I am a better investor overall.

Multiple studies have proved that sleeping after learning new information helps you remember that information. The author further has done brain studies to discover exactly why and how the memory gets established. What happens is that during NREM sleep, or deep sleep, the memory is moved from the short-term storage site of the hippocampus to the long-term neocortex, where those memories will stay, possibly forever.

“By transferring memories of yesterday from the short-term repository of the hippocampus to the long-term home within the cortex, you awake with both yesterday’s experiences safely filed away and having regained your short-term storage capacity for new learning throughout that following day. The cycle repeats each day and night, clearing out the cache of short-term memory for the new imprinting of facts, while accumulating an ever-updated catalog of past memories. Sleep is constantly modifying the information architecture of the brain at night. Even daytime naps as short as twenty minutes can offer a memory consolidation advantage, so long as they contain enough NREM sleep.” (Chapter 6 of Why We Sleep, p.114-115 on my Kindle edition.)

Naps! Naps count! But here’s the bad news: as we age and get less and less deep sleep, in which slow brainwaves move those memories, we don’t transfer as many memories or open up as much space to learn new information. Therefore, the more deep sleep we can get, the more we hopefully prevent dementia and Alzheimer’s, as well as simply lengthen our intellectual abilities. It’s a huge point in favor of making real changes for better sleep.

4. Sleep Practice

After I finished the book, I was completely obsessed with getting better sleep, and implemented good sleep hygiene in my house. Good sleep hygiene recommended by the book includes using no- or low-light in the evenings, no screens in the evenings, winding down with a hot bath, keeping the bedroom cool, not having caffeine or alcohol, exercising during the day, and getting maximum sunlight at midday. Yeah. Basically nighttime is about going sleep. It’s not great for the social life.

Still, I did it! For about a week, I banned screens after dark, cooked dinner in hazy low light, and listened to an audiobook in the near-dark as I got ready for bed. Guess what? It all worked, extremely well. I went to sleep easily and early. I was incredibly bored all evening, but I did go to sleep.

Then, each night, I woke up in the middle of the night and was awake for HOURS. It was awful, frustrating, exhausting insomnia, the entire time of this Sleep Hygiene Experiment. I eventually theorized that my body was so confused about what had happened regarding its sleep schedule that it thought when I went to sleep that it was actually a nap, rather than going to sleep for the night. I gave up most of the sleep hygiene, turned the TV back on at night, started going to bed later, and my sleep got a lot better.

So, I need to work out the kinks.

Actions I’ve taken to get more sleep:

Sleep tracking. Hands down, the best thing I have done to help my sleep is to simply become aware of how much I am sleeping. I thought I had a pretty good sense of it, and I also thought I slept a decent amount. Not always 8 hours, but I thought I did ok. I got a sleep tracking device, though, and it tells me differently. I’m rarely getting 8 hours. It’s often only six, and on good nights, seven. Six! That is NOT enough, and now that I’m aware of it, I can feel a direct link between those nights of inadequate sleep and my mental creativity and energy. I get far less done in more time after those nights, and that is just plain dumb.

Night mode on screens. I’ve set all devices all the time to be in night mode, in which the screen is low on awakening blue light and high on yellow light. At first I set them to be in night mode only in the evening, and then I thought, “Why not reduce it all the time?” So I changed it to always be on, and I do feel that it’s easier on my eyes. Plus, what an easy change.

Reduce caffeine. It won’t shock you to know that caffeine is the enemy of sleep. It stays in the brain for up to 10-14 hours and the brain must fight its effects with other chemicals to achieve sleep. Furthermore, sleep that has to fight caffeine will be less productive sleep – it won’t create as many of those lovely benefits of sleep. Therefore, I now have only one cup of coffee first thing in the morning to tell my body it’s time to wake up. No caffeine after that. I’ve found it to be an easy adjustment, actually, and my body now knows not to expect caffeine later than that.

Get sunlight around midday. I try to go outside at the peak of my daytime circadian rhythm, around noon-2pm, to help my body confirm by being in direct sunlight that it is indeed midday and after that, it should start winding down towards sleep and produce melatonin. Another idea some people like is to get sunlight first thing in the morning to tell the body that it’s time to wake up, but it’s cold in the morning where I live. Inside is nice.

Avoid alcohol at night. There’s a whole section in the book about how utterly terrible alcohol is for the restorative and beneficial part of sleep. Many people use alcohol to go to sleep, and even our terminology – a “nightcap” – perpetuates the view of alcohol as a soporific. What alcohol does, though, according to the research, is put you into a stupor, which is not the same as restorative sleep. Without getting quality sleep, you don’t get all the benefits of sleep – which are, after all, the whole point. So, even if it does put you to sleep, drinking and sleeping is counterproductive.

Actions I would like to add to get more sleep:

Keep the bedroom cool. I’ve kind of accomplished this one, by virtue of it being winter. There aren’t a lot of climate controlled houses or air conditioning in Switzerland, so putting the bedroom temperature at a steady low temp is quite difficult. I’m not sure yet how to accomplish it once summer comes, and it’s on my mind. Portable air conditioner?

Blue light filtering glasses. I’d like to buy some glasses with a blue light filter to wear at night, to wind down towards sleep. It’s probably overkill, since I already set my screens to night mode, but I’m curious to see if it makes any difference for me. When I went full Sleep Hygiene Experiment and got horribly bored in the dark evenings, I realized I wasn’t going to be able to keep that up. Maybe with these glasses, a little TV in the evening would be ok?

Reduce, or, if possible, eliminate, my screen time after dark. For several weeks after I had eye surgery, I could use my eye in most of normal life, except for screens. My eye would hurt after only a few minutes of looking at my computer or phone. Maybe from the flickering on the screen? I’m not sure, but I flashed to that experience when I read the section of the book about the impact of screens on our sleep. If screens had that much impact on my eye, they may have a similar impact now on my healed eyes and I just can’t feel it as much. It’s purely anecdotal, but the experience is enough for me to try to make some changes to my screen time. In addition, my effort to produce more deep work (see the last few issues) means I’d like to implement a tech shutdown around 5pm. So, now I have TWO reasons to avoid screens in the evening. Have I accomplished it yet? Nope. Creating a reliable evening shutdown is definitely going to be one of my goals in 2020.

5. Military Method

For most of us, we might die eventually of Alzheimer’s brought on by lack of sleep, but it’s hard to feel that TONIGHT it’s really life or death. One of the criticisms of the Why We Sleep book is that it doesn’t give direct information about how to sleep better. I disagree with that criticism. I think people who come away with the impression that this book makes no recommendations want more of a silver bullet than to change their lifestyles. They don’t want to take seriously that they shouldn’t drink alcohol at night, not use screens, or go to bed at a regular time, and they probably really don’t want to accept that electric lights are one of the biggest threats to good sleep. These solutions are just too…simple, maybe. And also, at the same time, too hard.

However, maybe there is a quick way to get to sleep, without making all the lifestyle changes Walker recommends.

Who has an extremely vested interest in people being able to sleep under some of the most stressful conditions imaginable? The military. The military wants its people alert, able to make smart quick decisions under stress, and as healthy as possible. The military knows its soldiers need sleep.

Therefore, it’s not terribly surprising that the military has tried to systematize sleep. The methodology they advise to fall asleep quickly are focused on releasing tension from the body and then imagining lying in a soothing spot, like a canoe with a huge blue sky above you, or in a thick black velvet hammock. See the links below in Let’s Get Practical section for the military’s step-by-step method.

To summarize, I can’t recommend this book enough. I’ve made everyone in my family read it already, my friends are tired of hearing about it, and of course, now I’m telling you about it! To merely know sleep’s importance is not enough to make a change, but it is the necessary first step. Just imagine how much we can do as investors who have fully-functioning brains, as opposed to the partially-impaired brain most of us deal with every day (I certainly do, after those six-hour-sleep nights).

I am becoming convinced that all parts of my life affect my investing practice, and if this is my true practice, to which I am committed over most else (my family is more important, but not much else is) then I must try to balance my life to support my investing practice as well as I possibly can.

The practice of investing is not just investing, I am learning. It is the practice of a good life.

We’re well into holiday season already, and hopefully you have a few days of vacation coming your way. It’s a lovely opportunity to prioritize sleep.

Enjoy your practice!


Take one to two weeks to change nothing, and simply notice how sleep affects your investing practice. Take note of your sleep time and wake time, and take note of your investing practice time. Also notice your attitude, enthusiasm, and creativity during investing practice. Is there any correlation?

Military method of how to fall asleep in two minutes:

  • Video here (skip ahead to the 2:00 mark to skip the extraneous intro stuff).
  • Fast Company article about the author’s experience trying the method out, here.

I highly recommend listening to the audiobook edition of Why We Sleep. It’s read by a lovely, soft-spoken narrator, Steve West, and I got very addicted to listening to him in the evenings with the lights down low.

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