THE ROAD LESS TRAVELLED: THINKING IN THE TIME OF CORONA
Updated: Jun 24, 2020
Head: Business Development & Marketing
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
I had the bulk of this article going on in my head and, looking for an introduction I came across this extract from A Tale of Two Cities written by Charles Dickens in 1859. Wow!...talk about the more things change, the more they stay the same…
The thing about this best/worst time is the opportunity it’s created to look more closely at the petri dish of our world…if we choose to. The intensity with which we look remains our own choice; we can turn the lens of the microscope as intensely as we wish (or we can leave the lens cap on) - depending on our capacity and tolerance for discomfort. This is much like the hot/cold shower water therapy; you know that to have a cold water burst at the end of your shower is good for you, for your immune system, your energy level and your inner James Bond….but even knowing that it’s good for you, it still requires great fortitude to implement.
An intriguing realisation as a result of this Great Pause I’d like to raise is this: the comprehension that truth is elusive. From a much broader, profound perspective, only what is permanent is truth; and similarly, what is truth is permanent – which renders our everyday working truth not truth at all anyway…but before we get swamped by more Alan Watts (rolling of eyes noted) let me remain in the mundane and explain.
Context is so critical to what we ultimately define and accept as our truth; how much information can we access, assess, and absorb for realistic context? Further, this truth-in-context, when distilled to its essence, produces a truth scenario that is as individual and unique as a fingerprint.
The most obvious critical factor in distilling our truth is in the language we use. In our industry we glibly use the words cautious, moderate, and aggressive to identify investors’ capacity for risk. But words can have different meanings to different people.
Using speed as an example: I think that driving at 120km/hour is fast; my sons think that is pedestrian. BUT…I still get speeding fines; because I drive 120km/hour in a 100km/hour zone. My tolerance for speed has not changed; the surrounding environment does.
This industry is chock-a-block with extremely intelligent, highly educated, very experienced, and passionate individuals…which creates a high standard of energy and execution. But here’s the nub: How do we remain constantly conscious, current, and informed, open-minded and willing to embrace the new, to avoid the fatigue that all of us suffer as a result of constant information overload?
Again, an example: I was chatting recently with an esteemed and astute colleague (fortunately I’m surrounded by them), and he was telling me of the story of two young South Africans who bought a piece of land in the Free State (for $1 incidentally) and accidentally discovered that the land turns out to have one of the richest reserves of helium in the world. My first thought was, how valuable can that be…we can’t have birthday parties into the foreseeable future, so balloons and squeaky voices won’t be happening anytime soon. But apparently helium is one of the world’s most critical gasses and is not only highly sought after but also in very short supply globally. It's a very interesting read...
Where am I going with this? These two young men had bought the piece of land for a completely different purpose and when they made this discovery, they approached a number of agencies to offer them access to this very valuable discovery. They were declined and rejected many times over and they needed to pound the pavements and keep knocking at many doors before they finally found a supporter for the gas world’s version of the holy grail.
The people at the desks behind the doors they were knocking on were highly educated, intelligent, experienced, and passionate individuals but they neglected to grasp this very valuable find with both hands…why? They’d seen these claims before, they’d seen the movie, read the book, and declined to buy any more T-shirts. It’s so easy to slump into the malaise of being world-weary, jaded, and cynical. The challenge is to keep an open mind, remain amenable to new developments and cognisant of what the disruptors are up to. Otherwise we run the risk of missing the new, new thing…
And how much is risk complicated (and increased) by complexity?
It’s exhausting – this pace of life, the plethora of information and sophisticated data coming at us in a constant torrent. We tend to establish a commitment to an ideal, a belief in a process, we set up camp there and establish a little safe zone, sipping happily on the Kool-Aid. We tend to let down our defenses and relax in the knowledge that what we understand and subscribe to is invincible.
Then it becomes apparent that this position is in fact vulnerable to error, is incomplete, misinformed or just good old-fashioned disingenuous. Then you have to pack up the camp that you so lovingly and carefully established in that zone, jump onto the pendulum, and move into a new zone…and then our tendency is to set up camp all over again. Eventually it begins to feel like the pendulum is attached to a huge grandfather clock on speed. The reason that this is exhausting is because we are attached to an outcome. If we were able to remain open-minded and fluid in our approach, open to alternative views and strategies, investigate and interrogate them without attaching to an outcome, there would be so much less trauma involved in realising that there may be another way.
‘It is the mark of an educated mind to be able to entertain a thought without accepting it.’ ~Aristotle
It’s too simple to allocate a broad description of risk; we need try and create a three-dimensional perspective that includes all these factors: the tolerance for (sometimes very) bumpy rides (volatility), can I access my money when I need to (liquidity), and how safe is safe if my capital doesn’t keep up with inflation?
Perhaps a place to start is to re-look how we think about risk and investment scenarios. Instead of treading the well-worn paths, perhaps it’s time to embark along the road less travelled. Perhaps complex, over-designed solutions are not the only option, the only place we should establish a camp. Perhaps understanding that the simplicity of preserving an investor’s capital may not be exciting, but it does allow investors to sleep well at night.
And so when a simple, minimalist approach appears we should be cautious of dismissing it because how can the solution be that simple…my question is how not? The Gryphon multi asset funds may be simple in their concept, but the elegance and sophistication of their execution has meant that investors are not only sleeping well, they can also afford to buy a new mattress, if need be.
Simply this: complexity…do we need it? How much of it is our own need for its creation? How much do we use the complexity to justify our role in providing a solution?
“With all things being equal, the simplest explanation tends to be the right one.” ~ William of Ockham
And so these are the things I continue to ponder: how does gravity work, how do crickets and mosquitoes get up to the eighth floor, how to keep simple, simple…