Going Wild

Everything has gaps and holes. That is the key idea behind biodiversity and wilding. We are wild. We are rough on the edges. We don’t know, and we don’t have full insight, and we try, and we make mistakes. It is that imperfection that allows us to drive forward as an active participant in the chaotic change. If you want to be someone who decides, you need to build the skill to do the emotional work required for self-reflection. You also need to know yourself and the level that you want to go to. You need resources. You need guides, and you need to guide yourself. You need commitment, because if you are going to do the work, you are going to need to do the repair work. No risks or actions can be taken without regular maintenance, repair work, and downtime. The five core points of yoga are proper exercise, proper breathing, proper diet, proper relaxation, and proper mental health. We focus on our actions/choices, but the support/foundation that allows you to make choices is just as important. 

Free-ranging Longhorn Cattle

Just Because it is Green

Pure equality would restrict us. Like the monoculture of a Palm Oil Plantation versus the rich biodiversity of a Rain Forest. One may be green, but the life disappears. Daniel Dennett’s book “Darwin's Dangerous Idea” reframed the concept of evolution in a way that I had not understood before. I always had the sense that it was important to have some driving sense of progress. We want some knowledge of how things are going to play out. That is why we love this idea of cause and effect. Then we can control what is going to happen. Letting go of that control is very difficult. That is Darwin's dangerous idea. It talks about the Red Queen, in Alice in Wonderland. Where she has to run as fast as she can just to stay in the same place. We have to step back and start looking at our idea of progress.

A Palm Oil Plantation in Malaysia

Home for Bees

Two concepts I am progressively incorporating into my investment philosophy are Rewilding and Biodiversity. My Father-in-Law is a Natural Beekeeper and I like the idea of Natural Stockkeeping. Recognising that it is the bee that does the work. Where the goal is to do as little as possible, but not less. You have a roll, but it is more custodial. As we are grappling with a world that consumes too much already, yet is still struggling with mass poverty and hand-to-mouth living, we have to come up with new stories. In “Stubborn Attachments”, Tyler Cowen talks about twisting the maths of finance to not excessively discount (ignore) the future, and to focus on Maximum Sustainable Growth. David Attenborough reminds us of the seemingly obvious observation that something is only sustainable if you can do it forever. One measure of growth that is dangerous is activity. Doing more is not always doing better. Controlling more is not always doing better. Sometimes we can do better, without doing, and releasing the potential outcomes.

When All Thrive

Fundamental investment management is the simple idea that the job that money does matters. You can trade anything with a pulse. Buying and selling based on a moving price, without even looking at what the price is connected to. Speculating on whether the price is going to go up or down. With fundamental investing, it is the underlying business that does the heavy lifting. A share is a slice of ownership in a real business with real products solving real problems. The price is not just a good or bad deal. Buying or selling is not a way of tricking other people. The price represents Capital that the business is custodian of. If the company handles the complex, random, and ambiguous world in way that solves problems creatively, it should be able to create value. It ceases to matter whether other companies do well or badly. Adam Smith’s great insight was that Capitalism can be Win-Win rather than a battle between Nation States. David Attenborough points out that Nature’s great insight is that a species can only thrive when those around them thrive.

What we do, matters

False Gods

Money makes money. This allows wealth to compound (the growth also produces), if not everything that is produced is consumed. If some of the fruit is planted, and given the space to grow. This is both powerful and dangerous. Ideally, you want to fail hard and memorably early on, to knock the delusions of grandeur out of you. You do not want to be that false god who complains that the (clean and comfortable) guest room is not up to the standards to which they are accustomed. Because if you do not regularly suffer some misfortune, chances are life will one day smack you hard and repeatedly in the face. Probably when you are managing other peoples’ money. As Mike Tyson said, “Everyone has a plan until they get punched in the mouth”. You cannot just judge yourself on how your path has played out. You cannot judge others without looking in a mirror and reflecting on your potential unwalked paths. We are communal animals, and every path is an alternative reality. One you could have easily been on. The key is not profit making and ego building. It is reinvestment, and building buffers and capacity for whatever punches are thrown.

Nergal Gate in Ninevah

Mytikas

One of the eternal questions in Investment is “Active vs Passive”. Should you just invest in a diversified index or is it worth paying a manager to pick the stocks for you? Should you invest in an Equity Fund, and are the associated fees “worth it”? Alpha is the measure of the value (defined as outperformance) added by a manager. The Existential Crisis managers face is that this can go to zero (or negative). The facts can unambiguously show you have added no value (as you define it) over the entire course of your career. Often when you are managing the most money you ever have. And after claiming fees and paying yourself a salary. I still believe in active management from a risk management perspective, but I have seen too many fallen Gods to read too much into the tea leaves about individuals. Like Natural Bee Keeping, and Rewilding, I suspect investment is more about being good custodians than claiming a well-rewarded seat on Olympus.

Wildly Constrained

“Rewilding is about letting nature take care of itself, enabling natural processes to shape land and sea, repair damaged ecosystems and restore degraded landscapes. Through rewilding, wildlife’s natural rhythms create wilder, more biodiverse habits” (rewildingeurope.com). Rewilding is David Attenborough’s call to arms in his witness statement, “A Life on our Planet”. He points out that “a species can only thrive when everything around it thrives too.” I don’t buy into Abundance culture. I can’t, having been born in Apartheid South Africa. The world has constraints. We have to solve the dual problem that we are consuming too much, and yet masses of us are living in poverty. In “Stubborn Attachments”, Tyler Cowen talks about Maximum Sustainable Growth. We need to grow our way out of poverty, while rethinking growth. Rethinking consumption. Rethinking how we impose ourselves on the world. And getting wilder.