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Enjoy the Ride
Investing as an allegory for life. And vice versa.
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Jason’s Random Words
First off, apologies that these Random Words are late this week. Ironically, the lateness is related to the subject as Jeff and I — like many of you I expect— are spending time with family and friends during the holidays.
In my case, we have six family members visiting for a week. If your mind immediately went to scenes from National Lampoon’s Christmas Vacation, trust your gut. I have a 20-foot inflatable Christmas tree in my front yard.
Needless to say, plenty of stress and messed-up expectations happen this time of the year for a lot of us, and it can be hard to see past what we see as failures to the tiny successes, and focus on what really matters.
It’s a lot like investing that way
Investing can be just a stressful and filled with messed-up expectations as family life. We can become fixated on something that’s really immaterial that didn’t work out (overcooking the turkey is the Outset Medical of holiday mistakes) but also shouldn’t cause your family any lasting harm. This can cause you to miss out on the good things (good homemade cranberry sauce is like Brookfield Infrastructure — an under-appreciated winner) that enrich your life and portfolio.
Balance and what matters most
Jeff and I talk a lot about our mistakes on the podcast. I’m a firm believer that avoiding mistakes, and learning the right lessons from your own mistakes and those of others, is paramount to making the most of your resources.
The problem with this approach is that it tends to emphasize mistakes. And this becomes even more problematic since, as Daniel Kahneman’s pioneering research showed, the pain of a loss hurts more than the pleasure of a profit, we focus on pain avoidance and not mistake avoidance
In other words, we don’t learn the right lessons, and we often outright ignore how we found a winning stock and just chalk it up to some reason that strikes our ego but doesn’t offer anything useful to finding more winners.
Finding the balance to consider both with the correct amount of focus is hard. We want perfection in an imperfect world.
Clark Griswold’s dad said Jack Daniels helped him survive the holidays. I do think a certain amount of liquid cheer can be useful this time of year, in moderation and enjoyed with others.
But I’ve found that taking a step back and considering whether the thing your fixated on in the moment will be — or should be — the thing you’ll remember in a decade or not is a great way to reset. Chances are, if my emotions are big and negative, your perspective is messed up and I’m looking too closely at something relatively unimportant and missing out on something good.
Find the good in your portfolio, your family, and your life. Avoid the mistakes, sure. But find the good, hold it close, and make it multiply.
You can do it,
Jason
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