Have you spent much time fishing?
Photo: Connie Young-Dubovsky. Source: USFWS. Public Doman.
Growing up in Minnesota, I spent a lot of time casting my line. Every year, my family would trek up to the border with Canada and rent a small housekeeping cottage on a lake up there. No matter the weather, we’d head out in small, open boats, and spent hours trolling up and down various reefs and sand bars. I can’t say that it this my favorite part of the summer, but at least it wasn’t hot. And there are things about fishing that I’ve learned to apply to other parts of my life.
The first thing about fishing is that, to the non-fishing public, it looks really boring. How can people do the same thing over and over with seemingly so little activity? But there are all kinds of variables: what kind of lure or bait to use, whether to “jig” the rod up and down, how the wind and weather might change, where to go on the lake. The possibilities seem endless. We always hired a local guide who had spent years in and around the lakes where we went. He led the way to his favorite spots, and he also helped us get ready for each day’s adventure.
And that’s another thing about fishing: you can never be too prepared. Equipment will malfunction or get lost; fish will be too big to land or too small to matter; storms will roll in or the sun will burn; we even had a gull take a lure, once. It was a challenge reeling that one in! We never knew what to expect, and so we prepared for all kinds of contingencies: extra gas for the engine, a paddle in the boat, extra tackle and line and lures.
Photo: Pam Tengdin. All rights reserved.
Last month I spent a little time in northern Minnesota, and it struck me how investing is a lot like fishing. It takes preparation, focus, and a bag of tricks. There are always new ideas for how to land the big one, but the fundamentals don’t really change: fish like to eat their favorite bait, and investments depend on the discounted value of future cash flows. Book-smarts matter, but so does experience.
Possibly the most important way investing is like fishing is that both require patience. We can go for long periods when nothing seems to happen, but when it does, we need to be ready. You can’t land every fish, and you can’t score with every investment. But if we don’t spend enough time doing either, we’ll miss out on 100% of the shots we don’t take. Time in the market matters more than timing the market, and time on the water is more important than picking the best time to be on the water.
In 1650 Isaak Walton wrote his classic reflection on fishing, “The Compleat Angler,” completed just after the English Civil War. In this work, Walton contrasts the peace and contemplation of fishing with the hurly-burly of the political and religious conflict of his day. He noted that fishing – or angling, as he calls it – can never be fully learnt. But it’s an art worthy of study. He expresses his hope that no one who truly studies the craft – or every honest angler – should be cursed with foul weather. May the same be true for every honest student of the markets!