Creating Calm

“Past performance is used as a guide only. It is no guarantee of future returns. Your investment can go up and down and you may not get back the full amount invested.” This is the standard disclaimer that all asset managers are obliged to make part of the conversation. Investments can, and do, double, triple, quadruple, or go to zero. There is so much noise, and difference between daily, monthly, and annual returns that it bears little resemblance to a salary. Even though your money is working. A salary is more analogous to a dividend. A dividend gets declared. Management aim to smoothly pay for the use of Capital. Aim to increase it each year. To pay it sustainably. They consider the strength of the capital to endure, and the ability of the business to adjust. The challenge is looking for the signal in the noise. Creating the ability to cope with the noise. Creating calm in a continuous storm.

Uncontrollable

I have always envied Hole Diggers. Someone whose job it is to dig 6 holes. They dig 8, drop the mic, and leave work early. The ask and offer is incredibly clear. I used to love Maths at school. Yes, Mrs Chick used to tease me about going via Cape Town to a solution, but it was either right or wrong. And she could show me the short cuts. Mr Lichkus and I would go head to head in epic battles in the Art Room. I had to lean into chaos. I once let my classmates have an hour to do whatever they wanted to my piece. Flames and burnt plastic followed. As I coughed and sneezed black stuff from my nose during the next period in English class (similarly ambiguous), I did have a break through on reflection. Much harder won. In the Investment world people pretend it’s maths. That their track record points to their success. Except when that track record disappears. Then it is church, or art class, or English. Anything with wiggle room. Ambiguity provides space for BS. It also provides space for beauty. In the eye of the beholder, and in the control of the beholden.

Fire and Earth