As some of the readers of my CWS writings know, I’m a big music fan. I particularly enjoy using rock and roll lyrics to convey important points. I thought I would have some fun and share with you some of my favorite Investable Lyrics that I find myself quoting every now and then and why I find them relevant, particularly from an investor perspective, investable lyrics!
Investable Lyrics – Here’s what I mean:
The only constant is change. Prices are discounting futures that are moving targets. Sometimes they underprice those futures and other times they overvalue them. Free market economies require that the providers of goods and services be always evolving since if they’re not then their competitors will. As investors, it’s important to keep an open mind and realize that being tied to fixed ideas and ways of thinking is a recipe for becoming blindsided when change inevitably occurs.
There is nothing like a challenge to focus an individual. I have always found that I am most engaged and intentional when there are difficulties and challenges to overcome. Investors need to be prepared for tough times and relish the resulting challenges and try to find the opportunities that may emanate from them.
Following from the standing up to the challenges and looking for the opportunity this lyric shows how fortune can accrue to the prepared and courageous during tough times. As Baron Rothschild famously said, “Buy when there’s blood in the streets even if that blood is your own.” It’s important to look through the immense amount of pessimism and fear if you’ve been wounded in the massacre to take advantage of what might be once in a lifetime investment opportunities. For example, the capitalization of Russian stocks is approximately 32% of GDP while for the U.S. it exceeds 124%. Russia has so many problems with what is happening in Ukraine and the resulting sanctions, corruption, an unpredictable Putin, terrible demographics, alcoholism, and tremendous wealth inequality that it is hard to see how it can prosper with all of these headwinds. On the other hand, it’s possible that the stock market has overly discounted these issues and any kind of positive news can propel it higher since the securities are valued at such low levels.
Keep an open mind and be present to make connections where they don’t seemingly exist and you can make some powerful insights that can be quite lucrative. I remember when the Berlin Wall fell in 1989 and thinking that we should sell many of our California manufactured housing communities since defense spending would be severely curtailed. The so-called “peace dividend” did ending up crushing many of the defense contractors and led to significant numbers of high paying jobs going away and never returning. We moved most of the money into foreclosed/distressed apartments in Texas and our investors prospered as a result.
We really have the potential of making things much worse than need be if we let our ego and pride get in the way. If we take a step back, reflect, and think about the situation objectively and from the other person’s perspective then we might get the outcome we’re looking for. Often times we’re married to what we think our assets are worth, particularly our homes. And when we go to sell them and we don’t get the offers we want then we react very emotionally and negatively and take the lower offer as a personal insult. Oftentimes, however, if we handle the information with equanimity and our response with some finesse then we may come to realize that it might be a fair offer and perhaps we can make up for our disappointment with the purchase of the next home.
So often life unfolds in ways we didn’t expect or different than what appeared on the piece of paper. It’s important to be open to change and roll with the punches and enjoy the unexpected zigs and zags of the journey. Often times I have found that very purposeful people tend to find the success they set out to achieve but not necessarily in the precise way they laid out in their planning. They have to be open to the signs and signals to adjust the course.
Nothing can compete with our imagination. That is why it is so important we do all we can to avoid self-delusion and surround ourselves with people and resources that can help us look at ourselves and the world as realistically as possible. Yes, a strong imagination is important, along with having an opinion of how you would like things to be. But it should not come at the expense of doing the hard work and making the investment to improve what you have because nothing can compete with our imagination. There is always another property that has more upside or a better market but then there is the hard work of securing the deal, analyzing it, financing it, operating it, building a team to run it, etc. It’s the same with relationships. The rewards generated by focusing on what you have and nurturing those dwarf going from one to the next because they can’t compete with our imagination.
Some investments are unmitigated disasters but that shouldn’t close your mind to the potential for them to be lucrative in the future.
Classic Springsteen poetry. My intuitive reaction to it is that it’s important not to sink down deeper and deeper by compounding a problem by avoiding making difficult decisions or getting so wrapped up in one’s emotions in the heat of battle.
This is one of those be careful what you wish for. It’s the double-edged sword of having a lot and then become slaves to your possessions. You begin to focus on those and not losing them sometimes at the expense of personal contentment and relationship building/strengthening.
It’s important to recognize that investors and markets are highly influenced by fear and greed. As it’s been said, markets go up like an escalator and they often drop like an elevator. Recognizing the potential for craziness among market participants can keep us from going insane and actually if we are prepared, we welcome such collective madness.
I have learned an incredible amount from films, books, songs, traveling, walking cities without a purpose other than to observe and be open to discovery and wonder. There is no substitute for going out and being part of the world and tapping into some of the great geniuses the world has known in various disciplines to find wisdom and courage, two critical skills to investing successfully. The former helps avoid catastrophic losses while the latter offers the potential for extraordinary gains.
Never stop inquiring, wondering, asking why. Questions are so much more important than answers because they help us train our brains to think more expansively and creatively.
The classic case of confirmation bias. We lock on to a point of view and only look for evidence to support our position and disregard that which might prove it fallible, much to our detriment.
Fear is so paralyzing while laughter can be so freeing. It’s important to not take life too seriously and even when times are really dark do all you can to find the spark of humor in the situation. It’s surprising how freeing that can be.
The cause and solution to virtually all of our problems are in the mirror. Taking accountability for our role in what went wrong is so important. It shouldn’t be done in a way where we are falling on the sword but in order to find ways for us to dig deep into error analysis, see what truly went wrong and why, and not be afraid to see how we contributed to it. The most successful individuals ruthlessly engage in error correction and modify and adapt their systems and behaviors to lessen the probability they take place again in the future. Great investors do this as well. They study their investment failures and do their best to learn from their mistakes. Warren Buffett is quite famous for talking about his errors of commission, investments that did poorly, and errors of omission, investments he should have made but didn’t.
The more skilled we are at something the more we realize how much we don’t know. This keeps us hungry and humble and puts us on the road to acquiring deep domain knowledge and mastery.
Do not underestimate the power of the subconscious to speak to you through your dreams. The ego is dormant when we are sleeping so there are very few barriers in place to interfere with what is truly stirring in our souls. Pay attention to your dreams and subconscious. You never know what may come of them. George Soros has said that his back starts to hurt him when he has an investment position that just does not feel right to him.
There is nothing like hitting the pillow, falling right asleep, and having a full night of very peaceful, restful sleep. Without a clear conscience, however, this can be very difficult. Do things the right way, don’t cut corners, and treat others with compassion and respect, then you will find that you can hit the pillow with tremendous peace of mind and wake up refreshed and ready to take on the challenges and opportunities of the next day.
This speaks for itself. Don’t you agree? Investable Lyrics!