Article 01 - The Investment Honey or the Investment Sting

I still remember my professor in college telling us the story of investment strategies using orchards as metaphors.

He gave us the example of three types of Investors based on their approach:
1) Fisherman: This type of investor engages in day trading, relying on luck and quick market movements, akin to fishing daily for a catch.
2) Vegetable Farmer: This investor tends to short-term investments, putting in effort for quick returns, similar to growing vegetables with a brief season.
3) Fruit Orchard Owner: This investor takes a long-term view, carefully selecting and nurturing investments, similar to planting fruit trees that yield returns over many years.

Whilst listening to him, a thought cropped up in my mind. What if I am a fisherman's son and my family business is fishing and I know fishing, should I opt for being a vegetable farmer or a fruit orchard owner to avoid relying on the so-called “luck” similar to day trading, or should I continue to be a fisherman? This thought disturbed me for a few days. I wanted to speak to my professor about this. But, he seemed biased towards the " Fruit Orchard Owner" investment style.

However, one fine day I saw a bee sitting on a flower. At that moment, I realised that the way bees know the flower for nectar, no other insect knows it. Similarly, no scientist or even a doctor in science knows a flower to the extent with which a bee knows it.

Secondly, I also realised that Honey is the bees' way of preserving food for a tough day. It can be stored in the hive and consumed when needed. If bees stored nectar without turning it into honey, it would ferment. Thus, showing the usefulness of honey to bees.

Now, if a bee thinks to sting humans like mosquitoes do, for quick gains, or if mosquitoes think to start making honey like the bees do, for long-term benefits; would they be successful?

Well, if a bee stings us, it will die almost immediately. And, mosquitoes use nectar for survival but never to make honey.

Proving that, we could be any investor (Day trader, short-term, long-term or any other type). But, unless and until we understand our investments and their usefulness, we will always be poor at investing and get slaughtered like pigs. (Think of the Wall Street adage, “Bulls make money, bears make money, pigs get slaughtered”.)

Amazing!! That idea goes for my next article on PIGS (Poor Investors Get Slaughtered). Stay tuned.