After approximately a 10-year journey, I was fortunate enough to achieve the rank of black belt this past February. The journey continues and in many ways has just begun.
I am so grateful to my Sensei Terry Dow. I would be remiss if I didn’t also acknowledge two other very important Senseis in my journey; Terry’s wife Christina and Chris Buckner. I also want to thank all the other Senseis and people I have learned from and trained with at the Training Station. Amazing people, I learned from some of the very best. It was truly an honor to achieve this rank, a life-long dream.
Black Belt and Investing
For me, the pursuit of mastery in martial arts, a lifelong never-ending pursuit, is similar to investing.
Why? Because of the layers upon layers of SKILL that each discipline requires, because of the HUMILITY you must have and, as importantly, because of the constant DISCIPLINE you must possess and exhibit. I will attempt to explain each.
Skill doesn’t happen overnight with investing or in the martial arts. Skill is acquired overtime layer after layer. In karate you have to experience a lot of joint manipulation, strikes and throws. In fact, one of the first things you learn in karate is how to fall properly. It is called a “break-fall.”
Investing is the same, you have to learn your craft, constantly building on the knowledge you’ve already amassed. Some of investing is science, but some is art. You don’t have to learn about joint manipulation, but you certainly will learn about market manipulation by central banks.
Much like learning about strikes in karate, with investing you have to learn how to strike when the iron is hot. For example, weighting your portfolio more toward sectors or industries that are hot or performing well.
Lastly, in karate you have to learn how to fall properly. With investing you have to learn how to avoid hard falls or losses to your portfolio. Falling or losing is part of investing, just like it is in karate. You have to know how to “break” your fall so you can continue to fight, or fight again the next day.
There are very few Senseis that will graduate you through the various belts if you don’t possess the trait of humility.
Throughout a martial arts journey, you are always working with people that are far more skilled than yourself. You realize the restraint they show when teaching you. Many are literally lethal weapons, yet they remain humble.
Your karate skills develop on your journey but there is always someone who has greater skills than you, such as your Senseis. If you become a little too cocky, they can easily humble you.
With investing, you are never smarter than the market, period. The day you allow your hubris to take the lead, the market will humble you.
Stick to your plan and don’t get over your skis, be humble. If you’re not, if you get cocky, the market will humble you like a Sensei will their pupil. The market will provide you the humility you need. No need to lose money to learn this valuable lesson.
a: control gained by enforcing obedience or order
b: orderly or prescribed conduct or pattern of behavior
Discipline in karate is mostly described by “a” and “b” in the above definition. It is the same as any endeavor/goal you have. Show up and do the work. Whether that is showing up to the dojo or doing your stretching or other work on the side. Show up and do the work when you want to and when you don’t want to. No earth shattering information here. We all know what it takes to achieve something.
For investing it is the same, but also “c” in the definition above is very important. Self-control is imperative with investing.
What gets in the way with investing is your emotions. You always have to be aware of and guard against your emotions interfering with a successful investment approach.
Even the best investors lose sight of this important trait:
At Berkshire’s 2003 annual meeting, Buffett was asked what his biggest mistake was in recent years. His response: “Wal-Mart.” As he went on to note: “I set out to buy 100 million shares of Wal-Mart at a [pre-split price of] $23. We bought a little and it moved up a little, and I thought maybe it will come back a bit. That thumb-sucking has cost us in the current area of $10 billion.”
As Mr. Buffet alludes to in the quote above, stick to your plan. Self-control is essential with investing. Don’t second guess yourself or think that you have some insight on where the market or an investment is headed, you don’t!
I hate to quote the same person twice in the same article, but I love this quote by Buffet regarding investing discipline, time and patience:
“Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.” –Warren Buffett