“Slow and steady wins the (investing) race.” Check out how these tales apply to your investment strategies! [Wednesdays: The Independent Investor]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
I believe investing is an important activity each one of us must learn regardless of the career path or industry we are in. For me, this is one of the best vehicles that will help us achieve monetary wealth.
However, investing requires careful and strategic planning to yield great results. This is one of the things I’ve noticed in the disciplines of some of the world’s investing giants.
Interestingly, some investors have a unique source of inspiration for their financial strategies and activities: Aesop’s fables.
Curious about how they applied these stories in the context of investing?
Keep reading below to know the answer to this!
Miles Everson
CEO, MBO Partners
Chairman of the Advisory Board, The I Institute
The Independent Investor
The Town Mouse and The Country Mouse.
The Fox and The Grapes.
The Wolf and The Crane.
These are just a few of “Aesop’s Fables,” a collection of stories credited to Aesop, a storyteller believed to have lived in ancient Greece between 620 BCE and 564 BCE.
If you’ve read or heard a few of these fables, you would know these are not simply stories that use different animals as main characters. These narratives offer important lessons that readers and hearers―whether children or adults―can apply in their everyday lives.
But…
Do you know you can also use the lessons from these fables to make wise investment decisions?
In fact, some investors have already done this!
John Rogers is an American investor who founded Ariel Investments, the largest minority-run mutual fund firm in the US.
The logo of the firm―a tortoise holding the winner’s trophy―stems from Aesop’s fable, “The Tortoise and The Hare,” and the concept, “Slow and steady wins the race.”
Why do slow and steady investing strategies win the race?
According to Ken Faulkenberry, founder of the Arbor Investment Planner, building your wealth and financial portfolio is a marathon, not a sprint.
Just because you’re a high-net-worth individual or you have lots of money to invest, that doesn’t mean you should always take risks. Sometimes, you have to conserve your “energy” (wealth) so you can continue to run the race in the long term.
Here’s the thing: Tales of get-rich-quick investors who bought into various hot stocks and sold at the right time may sound exciting. However, if you’re looking to grow your portfolio, the tale of the tortoise and the hare may still make the most sense.
Why?
As Martin Lefebvre, Chief Investment Officer and Strategist at the National Bank Private Banking, said:
“Investing in a slow and steady way means better chances of achieving your goals. Advisers and fund managers know that the key to better success is not how often you trade or how you anticipate market timing, it’s how soon you get started in building a portfolio. You’re better off putting in USD 10 each month than USD 120 at the end of every year. The sooner you start, the more compounded the final results will be.”
Simply said, slow and steady investing isn’t boring. With this strategy, you watch your portfolio grow incrementally AND with minimized risk!
“The Boy Who Cried ‘Wolf’”
This fable tells the story of a shepherd boy who repeatedly tricked nearby villagers into thinking a wolf was attacking the town’s flock of sheep. Every time, the villagers would go and help the boy but only to find out he was joking.
… and then came the time when people got used to the boy’s tricks.
When a wolf actually appeared and the boy called for help, the villagers thought it was just another false alarm.
The result?
The wolf had his fill by eating some of the village’s sheep.
Much of the financial media falls into “The Boy Who Cried ‘Wolf’” category―they are built to sensationalize even the most mundane of topics in the financial industry.
Most days, when financial news reports on stock market volatility, it’s typically immaterial. The talking heads will note how the stock market is up, attributing it to lower oil prices. The next day, the same news channel will report that the stock market has fallen, attributing it to higher oil prices.
With adequate bravado, the headlines generate attention, but it is likely of little value to a smart investor.
The financial media’s cry of “Wolf!” at every turn stirs up the public’s emotions… and this can be detrimental to many portfolios. However, if you understand where the economy is in the economic cycle, then you’ll recognize these cries as nothing more than “daily blips,” as investor Seth Klarman refers to them.
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Investing is a great vehicle for achieving monetary wealth… and applying the lessons from the fables above will help you make wise investment decisions and be more cautious and deliberate about how you personally define “wealth.”
If you define wealth solely in terms of finances or money, you might end up working uncountable hours and having sleepless nights just to gain extra income.
On the other hand, if you define wealth as not only money but also time spent well with loved ones or any other relaxing activity, you’ll make personal decisions that will have significant benefits for you and your family.
Determine a good investment plan and portfolio with the help of some of Aesop’s teachings!
Just like in the story of “The Tortoise and The Hare,” keep in mind that slow and steady investing strategies win the race. As for the story of “The Boy Who Cried ‘Wolf,’” always remember to be wary about what the financial media tells you.
Then, whatever goals you set for your financial life, make sure to be happy and satisfied with what you achieve.
Happy “guided” investing!
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Wednesdays: The Independent Investor”
To best understand a firm, it makes sense to know its underlying earning power.
In two of the greatest books ever written on investing, the “Intelligent Investor” by Benjamin Graham and “Security Analysis” by David Dodd and Benjamin Graham (yes, Graham authored both of these books), the term “earning power” is mentioned hundreds of times.
LITERALLY.
Despite that, it’s surprising how earning power is mentioned seldomly in literature on business strategy. If the goal of a business is wealth creation, then the performance metrics must include the earning power concept.
Every Wednesday, we’ll publish investing tips and insights in accordance with the practices of some of the world’s greatest investors.
We make certain that these articles help you identify and separate the best companies from the worst, and develop your investing prowess in the long run.
Our goal?
To help you get on that path towards the greatest value creation in investing.
Hope you’ve found this week’s insights interesting and helpful.
Stay tuned for next Wednesday’s “The Independent Investor!”
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
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