Market Foolery – Lessons from Lowcountry

My favorite MarketFoolery episodes are when the host, Chris Hill, goes solo. Typically, he has a Motley Fool analyst on to discuss the latest headlines in the financial world, but once in a blue moon, he uses this platform to share his perspective from his 30+ years of investing. In this most recent episode, he started the episode that his brain is programmed to tie everything back to investing. 

He went on a vacation to South Carolina where he went paddleboarding. He told us how you always want to start your journey against the current of a river, so when you get tired and want to go back, the current will be with you. He was paddling as hard as he could, but he wasn’t making any forward progress because of the current. Eventually, the wind picked up, even more, pushing him back further. He figured out the strategy that paddling closer to the shore had a weaker current against him and also allowed for the opportunity to stop at docks along the way. He was able to make some progress and turned around when it was time to go home. “Man, was it glorious going back with the current,” he said. 

He couldn’t get out of his head of how similar this journey for him was to investing. There will always be times where you feel like you are going against the current in investing. The market is tanking and you don’t have any control over it. Day after day you see your portfolio drop and the market can’t seem to catch a break. He also says that it’s even worse when it feels like you are the only one going against the current. When it’s only your stocks that are in the red, it’s like seeing a motorboat zip by you with ease. People on board are smiling and waving at you while you are doing your best to try to stay in the same place against the current, just to be pushed further back. People heavily invested in growth stocks felt this way earlier this year while the recent darlings of the stock market sold off.

The reward is the paddleboard trip home with the current. This is after you put in the hard work of continuously adding to your portfolio after decades, seeing the ups and downs, but still sticking to your investments. It’s challenging working against the current. No one likes this. Time is your friend in investing, but you only truly see the magical powers of compounding after decades. When you first start investing you might only have a couple of hundred bucks in your portfolio. A great year of a 15-20% return only amounts to $30. If you have been willing to put up with the ride of the market for decades, that same 15-20% return can result in $30,000. We are willing to deal with the tough current now to allow the current to sail us into retirement.

Chris Hill also talks about Rodney Scott’s BBQ in Charleston, where he ate during his trip. Rodney Scott is a pitmaster who is highlighted in Netflix’s Chef’s Table BBQ. 

(I’ll give a quick plug to the episode because I want to be Rodney Scott’s friend. He took his family-run general store in rural South Carolina and perfected his craft. He is a genuine person that wants to do good for others and he makes some kick-ass BBQ. What more could I want from a friend? Go check out the episode!) 

From the episode of Chef’s Table, Daniel Vaughn, the BBQ editor at Texas Monthly Magazine, was interviewed and said “BBQ isn’t about concocting some rub that’s your secret ingredient. Pitmasters are willing to tell you everything they do. They’ll sit back and say well, ‘Good Luck’.” Hill hammers home the point that Vaughn doesn’t think the pitmasters are arrogant, they just know what it takes. They know how many hours a great BBQ requires. They’ve put in the required time to master their craft. 

It’s hard not to see the comparison to investing. There is no secret ingredient. We all know what we need to do. Continue to put our money away into the stock market for the years to come and wait. There will be record highs of the stock market, and drops of 20% in a short period of time. Those drops will sting. We expect to make money from investing, not lose it. It’s part of the process. We all know there will be another crash in the future, just for the stock market to rebound. We know that we’ll need to hold great companies when others are selling. Just like great BBQ, the profits will come, you just need to be patient. 

Peace and Love.