The Investment Boat
An investment metaphor
This is going to be a bit esoteric, but I think it actually can be pretty helpful in formulating perspective and keeping focus in the right places.
Picture a ship in the late 1700s heading out to sea.
What adventure awaits: Will it be an easy, successful voyage, or are you, the captain, heading into the perfect storm?
What you must expect is that there will be tailwinds and headwinds, hidden currents below the surface, crosswinds and crosscurrents, rocks and icebergs, but also islands filled with treasure, mermaids and mermen, if you will, and many other wonderful things along the way.
It will be hard to know when you’ve been ever so slightly yet consistently pulled off course meaning you won't detect it until much time has passed and therefore meaningful drift has occurred—potentially putting you into treacherous waters and certainly taking you off course.
It will also be difficult to perceive the help you’re getting from a tailwind or a current working in your favor. In those cases you think you’re making great time because of all of your great decisions (expert seamanship), but in fact, you’ve been more lucky than good.
Be careful that you don’t get lost in the fun and frivolity of treasure Island and the Barbary Coast. You may wake up from a three day drunken stupor, much poorer and behind schedule than you intended when you first pulled into port.
There may be a shortcut through the Volatility Straights, but beware the risks. While many claim to have successfully crossed it, many more have had the winds smash their boats into the rocks or watch as the tide ebbs away revealing a passage too narrow to cross.
Preparing for the Sirens is easier said than done as they are extremely deceptive and quite varied. For it is generally not the Sirens (risk) you are prepared for that will tempt, trick, and threaten you. It is the Siren you never imagined that will do so.
As investors we launched on a maiden voyage long before we realized we had left port. Whether we want to or not, we are facing all of these factors and more on our journey. Part of the difficulty is that we never quite know what our desired destination is much less the best course to set so as to reach it.
PS: Loosely related:
