Tow In Surfing and Investing

Growing up in the Hawaiian islands was a treat.  Especially, if you surfed, and I did. I remember as a kid watching the big wave riding surf contests held at Waimea Bay, Sunset, or Pipeline on the North Shore of Oahu.  Back then the big wave surfers used longboards called guns. They would paddle these boards as fast as they could, and would barely make it into these waves making for a steep high speed drop.  If they made the drop they had to out run a massive wall of water breaking in front of them. If they didn’t beat the wave they risked being held under for a long time, or getting slammed against the reef, or even death.  The risk of big wave surfing is something that is very hard to understand unless you’ve been out in a large waves. We used to surf ten foot waves that had twenty foot faces at the North Shore. Wiping out or getting caught inside was hair raising.  Having to paddle as fast as you can, so you don’t get smashed by a cloud set, or duck diving under a seven foot wall of white wash in large waves is super scary and risky. The fear factor of getting held under, slammed against the reef, or possibly drowning gets your heart pounding a hundred miles per hour.  It is something I would never have done without years of learning, practice, or training, and these waves were only ten feet tall. Small in comparison to big wave riding.

Back then it was unimaginable to surf any waves bigger than twenty feet, since the speed needed to catch larger waves wasn’t achievable by paddling a board as fast as you could.  In the 1990’s a crew of surfers, with the most notoriable being Laird Hamilton, Buzzy Kerbox, and Dave Kalma from Hawaii figured out a way to tow the surfer into the biggest of waves with a personal watercraft of some type sort of like water skiing.  Over time they modified the surf boards, by making them smaller and faster and putting foot straps on the boards. The development of a compressed air wetsuit added to the safety factor and became a part of sport. Hence, they became the experts at the craft and created a way to now surf waves as large as forty or sixty feet all over the world.  Their knowledge and skill set made it possible for them to minimize the scary factor and fear, and create a high success of them being able to ride waves larger than others ever imagined. It is a great site to see.   

The story above is quite similar to that of the long term top investors in the world.  What makes the long term top investors successful is that when unforeseen events occur or the markets that they study become big and volatile with giant economic waves these top investors are ready to act.  They have developed the tools, skills, and emotional characteristics to ride these big volatile market gyrations and attack them with vigor financially, since they know their chances of being successful on the ride is good, because they are prepared.  These investors know the businesses or investment vehicles they are investing in well enough to understand the chaos happening in the long term doesn’t change the value of what they own or want to own. It is said that at the eye of a hurricane lies calm waters.  The top investors that have continuously gained from these storms sit at the eye of the hurricane. In order to achieve this element of calm confidence requires avid learning and study. Something most average investors don’t do, yet a very high percentage of the average investors out there invests dreaming of finding the next Berkshire Hathaway or Microsoft without understanding all the elements involved within investing, and instead they usually drown or get out of the water during these financial storms due to fear of loss.  Ironically, the top investors don’t consider these storms as a big risk, but rather and opportunity. They consider them less risky, because they’ve trained themselves to wait patiently for them to occur. They know these storms allow them to take positions in their investments at lower price points thereby lowering their risk. 

If you’re an average investor, and don’t want to teach yourself how to handle these big financial events or major storms, do yourself a favor and find a good lifeguard, so after you’ve learned how to swim you and can swim in financial waters knowing there’s someone making sure you don’t drown.