What Type of Tail Chasing Are You Doing?
A quick story to bring us all back down to earth, during these unprecedented times of geopolitical, economic, and emotional bewilderment.
My six-year-old son stood to my left, reeling and pulling with all his might, laughing with every massive tug. Just down the beach to my right was a man in his eighties, doing the exact same thing.
Separated by seven decades, both were experiencing the identical thrill of battling an unseen sea monster.
Statistically, the young and the old fish the most. The younger generation brings boundless optimism, believing every single cast will yield the catch of the day. The older generation possesses the patient wisdom to persevere through the long, quiet lulls.
Crucially, both groups also have the most free time.
Conversely, people aged 45 to 55 fish the least. This middle-aged group is simply too busy raising families, paying bills, and managing the stress of an impending mid-life crisis.
Ironically, this exact demographic also faces the highest rate of bankruptcy, which peaks at age 49. At this stage in life, the compounding effects of poor decisions or bad luck seem to collide into a major financial crisis.
Yet, these same stressed, time-starved individuals make up the majority of investing professionals. The people carrying the heaviest burdens are the ones making the most consequential financial decisions for their clients, their families, and themselves.
They are constantly running on a treadmill.
In America, we have a unique phrase for this frantic state of being: “chasing tail.”
If you are pursuing romance, you are chasing tail. If you are hunting or fishing, you are chasing tail. And if you are incredibly busy but accomplishing absolutely nothing, you are also chasing tail.
My son and that elderly man were happily chasing tail on the beach. Meanwhile, the vast majority of finance professionals are chasing tail in a much more stressful way.
We are currently navigating one of the most chaotic investment environments in modern history. Hype and narratives, rather than true financial fundamentals, are driving the markets. As a result, investors are spinning in circles, chasing their own tails with increasing speed.
If you are going to head out and chase tail, just make sure you aren’t chasing your own.