Sink or Swim

Two summers back, over a lunch conversation, I was asked about my thoughts and emotions during the 2008-9 stock turn down. I pondered his question and a childhood incident came to mind, something which I had not thought about in decades. At about age 6, my family went to a group picnic on the 4^th of July. At the picnic site there were row boats, tied to a dock, that we kids were playing with. At one point, I was alone in one of the boats and another kid pushed it away from the dock. The tether came loose from the dock and the boat drifted into the open water. I recall vividly my fear and feeling the impulse to jump overboard. Just as vividly I recall realizing that I could not swim, and that jumping in was not a good idea. So I stayed in the boat and adults soon intervened, bringing me back to shore. I relayed the memory of this incident to my lunch host. I told him that the impulse to sell everything in the bear market was great, but that as a long term investor, I actively choose not to follow the impulse.

Not jumping from the boat on the 4^th of July as a child, is the earliest time I recall exercising a trait that has evolved to part of a philosophy of adult life: I try to understand my emotions and impulses, and where they come from, but I seek to make my decisions on the basis of reason. That process of reasoning also needs to take into consideration an understanding of my emotional needs. It’s what I did in 1987, 2001, 2008 and during many other, non-fiscal moments of passion in my life. Post script: not long after that childhood incident, my parents enrolled me in Red Cross classes and I became an excellent swimmer.