To The Moon

Just completed my full marathon.[Grin] 

As I was running, I was pondering on the similarities between investing and marathon running.

Investing is like a marathon.

You won't get results for a marathon just by running, 1km, 5km, 10km or even 21km. You might just go flat at 30~35km when you hit the wall also. Likewise, investing is not a 1 month, 6month, 3 or 5 year affair. It's a lifetime of commitment and pure dedication.

Mindset is critical.

In a 42.125km race, the right mindset is critical. You will face demons from within, like "let's go for a break", "give up now and fight another day" or even doubt yourself "am I cut out forthis"? Likewise in investing, the same demons will haunt you. Thus it's essential to have a Growth Mindset and one that embraces learning from failure. 

Will power is not the only ingredient.

I overheard this helper at the marathon miss quote that "all that it takes to complete a marathon is will powder." It couldn't be more incorrect. Don't get me wrong, will powder is important. However you need lots of effort, practice, corrections, failures, experimentation and adaptability over an extended period of time as ingredients in the dish as well. Likewise in Investing, Will Power alone isn't going to help you.

Study the possible risks

Marathon preparation involves studying all thepossible risks in advance and learning how to mitigate them. For example, what would you do if your shoes spoilt mid way? I saw a few runners run barefoot or with socks only halfway,while holding their faulty shoes. How much rest do you need before the run? How do you prevent dehydration? Likewise, for Investment, a deep studying of the risks is essential. What happens if the sponsor to a business goes burst? What if the management reported false numbers? What if the business goes belly under? 

Learn to adapt

Marathon running forces you to adapt along the way. Suddenly you cannot run mid way, how? Suddenly there's a downpour. Suddenly thesun become super hot. Suddenly there isn't any more isotonic drinks. Suddenly you can't find the toilet. You get it. Likewise in investing, the Agile mindset is crucial in adapting to multiple changes in the environment. The CEO leaves. Cash flow gets reduced. Inventory piles up.Margins gets compressed. The major customer leaves.

Victory tastes the sweetest.

The feeling on completion is mind blowing. Having gone through all the trials and tribulationson the race course, the final victory is indescribable. Likewise when your investment thesis iscorrect, when your net worth zooms up sky high or when you've sold and made money, you feel elated. However don't get too comfortable and rest on your laurels as the next challenge is just round the corner. 

Ultimately, like Marathon running, investIng is a long drawn process. Thus it is vital that we enjoy the process.

What else do you think is like Investing?

Keen to hear from you.