On our trip to Cape Town recently, Jurgen, a long-term friend invited us to go for a hike up the mountain near his home. Not the highest peak in the range around Table Mountain, but still, for me, it turned out to be a serious challenge. (According to my phone, “flights climbed” was exactly 100 floors).
Jurgen is the same age as me and as we worked our way up the mountain, I had to stop on regular occasions. Would have loved to have known what my pulse was – I was battling. Jurgen was cruising – he seemed like he was on a flat stroll. I was too tired to worry and I just put it down to him being used to the mountain.
We got to the top, enjoyed the amazing view and then started our way down. Jurgen was off like a mountain goat being chased by a mountain leopard. I thought he was crazy he was going so fast. The path was fairly rocky with some man-made steps suspended over the steeper sections but he seemed to be running on hot coals, lightly touching down only to bounce to the next one.
Over lunch, he explained the technique. “If you want speed you have to look ahead – not at where your feet are landing. If you look at every stone or rock, you are guaranteed to fall. That’s if you want to go fast. People who look at where their feet land will go slow. Basically, your brain gets rewired to focus on direction rather than every detailed stone or rock and it computes what it needs to do. You can’t look at your feet if you want to go fast” he stressed.
“But your risks are high at that speed” I said. “Yes, I fell quite badly only recently and have broken two toes when kicking rocks” he responded. “But you learn from it”. “How do you get up the mountain so fast?” I asked. “It’s all in the glutes – you have to use your biggest muscles for power. Don’t use your quads – you will just get exhausted.”
Thanks – now you tell me!
It made me think about investors. Some want to go fast but look at their portfolio every day. They feel every ‘rock’ and it’s a matter of time until they fall. There’s a lot of research which shows a correlation between how frequently investors look at their portfolio and how frequently they trade. And frequent trading results in poor returns. It’s going to be a lot easier (and more successful), to take a fairly superficial look at short-term results and focus more on direction.
Investors generally also don’t use their ‘biggest muscles’ well enough. Saving, human capital and the capitalist markets provide the power. Saving will come naturally if you don’t carry any wastage. (Jurgen carries a water bottle – nothing else). Human capital provides an income stream for as long as you have health and using the capitalist markets provides the speed.
But many investors will need to train their brains and their capitalist muscles. Just as it is difficult to train yourself to look ahead and not down when running on an unknown path, it is also going to take some training to get used to the stock markets volatility and regular upheavals. And the last thing you need when running down a mountain path is someone constantly commentating in your ear on every stone, rock and curve in the pathway! Ignore the media commentators.