Friends,
As I've talked about in the past, I (Stoffel, here) spend a good chunk of every winter with my family in Costa Rica. One of the biggest draws for tourists is watching sea turtles lay their eggs, then -- two months later -- watching those same eggs hatch.
But actually watching this is much harder than you might think. These turtles have for millennia abided by a simple rule to survive:
Crawl towards the bright, open horizon [which is the ocean]
Simple rule, simple result: turtles survived and thrived.
A "mismatch" to a new environment
But over the 150 years, that has changed. Artificial light -- street lights, smartphone cameras, etc. -- creates an equally attractive bright horizon. But it leads to disaster.
Same rule, different outcome. What was once as reliable as gospel becomes the very thing that threatens someone's survival. There's a fundamental mismatch between the foundational environment and the present environment.
The same thing happens to humans, too. Children who grow up in abusive environments learn that other humans aren't safe and they have to fend for themselves. That helps keep them safe in the foundational environment, but makes bonding and entering into communities (potential "present" environments) difficult without psychological intervention.
Applied to investing
This has very real implications for us investors. Consider:
- If your foundational investing environment was the Great Recession of 2008, you may have quit investing altogether. Which is too bad, because the current environment has returned 1,400% since then.
- If your foundational investing environment was overly focused on asset-light models (think: SaaS), the current environment's focus on asset-heavy industries (think: energy, semiconductors, etc) has left you in the dust.
We've certainly been guilty of the second one -- and we're continually evaluating how this is playing out. It can be a bit bewildering.
However, instead of being a burden, we actually think this phenomenon underscores one of the greatest benefits of being an individual investor. You are forced to constantly calibrate whether the lessons you learned in the past still apply to the present.
If you take those lessons and apply them to all of the other areas of your life, there's a much better chance for social, emotional, and psychological growth. Over the long run, we think that's a pretty good deal.
Wishing you investing success,
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Brian Feroldi, Brian Stoffel, & Brian Withers
Long-Term Mindset
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