Saturday, 3 November 2018

Singapore Dividends for Financial Freedom - Trail Running and Investing

Jungle Running and Investing: Two Peas in a Pod

Alright folks. Here we all are again on another Sunday morning. And, my goodness aren't we having fun?

October was a bumpy ride in the markets, prompting many to freak and run to the hills in the grips of an atavistic freak out: Agghhhhhhhhhhhhhhhh!

Last week I commented on this in my post Chill Out in which I asked the spooked masses to think again before they do something silly, based on emotion rather than rational analysis.

So, how has your week been? I hope you've had a good one.

Something I've never shared with you is that running is one of my great passions. In particular, trail running. I've only been at it for a couple of years, but my God I love it.

While belting down a jungle trail, jumping over buttress roots and ducking under ferns, I feel a tremendous sense of freedom. With my heart thumping in my chest, I inhale long and intoxicating lungfuls of delicious air. At this time, niggling anxieties melt away and my brain, fizzes with endorphins and feels content.

So how does all this running chatter fit in on an investment blog I hear you mutter? Well, there's a lot of crossover between investing and trail running.

Let me run you (pardon the pun) you through a few:

The first is preparation. Before I set out on a jungle trail, I must make sure I am well hydrated. This involves drinking at least 2/3 liters of water in advance. Running trails in the tropics is a sweaty business and to avoid heat stroke, you must make sure to be nicely watered. Similarly, before you invest in an equity, you must analyze the necessary metrics, the management and the future prospects. Failing to do so would be childish and reckless. Real investing takes time; speculation doesn't. Thus, both runners and investors need to prepare.

The second is resilience. Running jungle trails is an extreme sport. Its physical demands are obvious, but it's the mental challenges that separate the men from the boys. As a novice trail runner, the mind has great power to control your physical output. For example, in the first six to ten weeks running if the mind says:

'You're too tired to climb another incline. Sure, why not walk for a bit and relax.'

In these early stages, you listen to this interior monologue and obey. What the mind says, goes. But as time ticks on, and so does your mileage, you learn to ignore the voice in your head. Pushing through the pain barrier time and time again, turns down the voice's volume. Its nattering fades into the background.

These days, I enjoy the challenge and am prepared to push though the burn. Why stop when you can push on?

Investing, likewise, requires similar resilience. Newbies, will observe their portfolio decline in value by 10% and panic. The voice in their head screams at them:

'Sell the lot! You've better off in cash. What if you lose the lot? This is time to get out of the game and wait for the next bull market!'

We saw this in October, with the blogging world pulsating with fear. Otherwise sensible people were airing existential crises for all to read. Many didn't sleep; hairlines receded. 

Let me ask you this: after spending years repeating the Buffet mantra of 'Be greedy when others are fearful' etc. why do the opposite. What's needed is a healthy dose of resilience, folks, and I recommend grabbing some soon before you whittle your hard earned money away. I believe by building up resistance to the voice while running can help you as an investor when times are tough. Give it a go and see if it works for you.

Finally, I think trail runners and investors both share focus. Imagine you have to run 20kms over three steep mountains, through leech infested swamps and via pineapple fields where cobras lurk... If you failed to visualize your path and got sidetracked by the whats and the ifs, you'd never get to the end. Your scattered mind would lead you off in the wrong direct, ending your chances of reaching the finishing line.

Investing, too, require a goal, usually referred to as an 'investing horizon'. Thus, do you want to hold share for 5, 10, 15, 20 years? Or do you want to be in the game for life? It's important to set up this goal before you invest a dollar because if you do, you're much more likely to stick to your game plan. Focus in investing is imperative to avoid irrational silliness.

OK, so that's the end of my wee rant for this week. I hope you enjoyed it. Please feel free to comment, but be nice to me. I'm a sensitive soul.

Until next week...

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  1. Interesting analogy. The age old wisdom of "If you fail to plan, you plan to fail" always holds true. Have a good week ahead.

  2. Thank you for your comment, TFG. It pays to be prepared for sure.

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