With vacation season upon us, I’ve noticed that more than a few of my blogging peers share a passion for angling like myself. There’s little doubt that we’ve each watched the days count down to that special day on the calendar with eager anticipation knowing we’re free to get out onto the water and enjoy one of the most challenging & rewarding pastimes known to us. Although I practice catch & release almost exclusively, my belief is that conservation is key for ensuring that future anglers have the same opportunities to enjoy that we ourselves have today.
Fishing or Angling is actually not that different from investing. They require patience, skill, an understanding of your environment and that sometimes “the fish need to win”. Like investing, you can develop different tactics through experience, trial & error and a variety of alternate methods that may help you increase your chances for success – but no one method is always full proof.
Patience can be the ultimate test for any angler. If on every cast you caught a fish, it wouldn’t be called fishing…you’d call it “catching”. It’s important to understand that investing is similar in this way; not every investment will pay off in the short-term or at all. There will be times when you “just can’t miss” and other times where it seems that considerable effort is required just to keep your head above water. Experience though will teach you that finding tactics that help increase your chances for success are well worth the effort.
The method that you use when fishing is also something that can have a huge impact on how successful you are. Whether you decide to cast, down rig, jig or use some other method of attracting a fish to your lure or bait; the presentation, technique and choice of lure will dictate how the fish reacts. There are additional factors to consider such as climate, water conditions or habitat. Something as simple as the moon phases or light conditions can have huge impacts on your ability to generate strikes. If you take the comparison of growth, value or index investing – the method you use may determine the success you enjoy depending on the same conditions of the environment you find yourself in.
A Growth investor may be very similar to the “run & gun” approach some tournament anglers employ. They’re looking to maximize their opportunities by seeking out the most bang for their buck – the most active fish they can find over a large body of water. Value investors tend to take a more disciplined approach by focusing on quality – so their tactics may include attempts to locate fish consistently for a higher cumulative result than the biggest trophy possible. Even a Contrarian angler, as in investing, may decide to use an unorthodox or out of favour lure in order to give them an advantage on the water. More often then not it’s not the new technology that works the best, but the techniques that have been used for generations.
The next time you encounter yourself asking if you’re prepared to invest in something you don’t completely understand – ask yourself if you would ever try fishing with an empty hook. That might sound silly to readers, but you might be surprised how often an investor will jump blind into the market in the hopes of getting lucky.
But in the end – there’s no replacement for experience. What you know today is half of what you knew yesterday and only a fraction of what you’ll know tomorrow. I’ve been fishing for over 25 years in all sorts of conditions, yet there are times when an angler with decades of experience on a body of water has schooled me horribly by a simple, methodical and efficient techniques for locating strikes. Sometimes it’s not what you know, but how you use that knowledge that helps you win in the end.
On that note…I’m off to the family cottage for 2 weeks with the family – Happy Investing