Reflections from 18,885 Feet

Nov 14, 2018

Bill Wendling at Mt. Kilimanjaro

Recently my wife and I traveled to Tanzania to climb Kilimanjaro, the tallest mountain in Africa. What started out a few years ago as a light-hearted, “some-day” idea turned into one of my bucket list items that seemed possible to fulfill. In our journey, I learned many lessons. A few of them are even relevant to investing!

Keep your mind in the boat and on your plan

Daniel James Brown’s best-selling book, The Boys in the Boat, tells the story of the 1930s University of Washington crew team and the importance of eliminating outside distractions. Rather than worrying about other teams or the opinions of others, their focus was on what they could control—their stroke and how they followed their coxswain’s commands. They used the mantra MIB to remind them to keep their “mind in the boat.”

I borrowed their mantra prior to and during our Kilimanjaro adventure. When you’re contemplating climbing a mountain, people often offer opinions ranging from doubtful or pessimistic to naively optimistic. The truth is most people don’t have a clue what’s involved, much less what our plan was to ensure our best chance for success.

This rings true for investing. Many people have opinions about investments, and many of these opinions are uninformed. Even more importantly, most of them don’t take into consideration your unique plan and its implementation. Your investments should fit your plan and follow a strategy that leads to long-term success.

Long-term success versus instant gratification

“Pole-pole” (pronounced po’-lay po’-lay). If I heard it once, I heard it a thousand times. Pole-pole is Swahili for “slowly.” Everyone wants to reach the top of the mountain as quickly as possible. But the key to climbing the mountain is to climb slowly and deliberately to give your body a chance to acclimate to the higher altitudes. There’s no fast and effective solution. It’s slow and steady all the way. Often this involves climbing to higher points in the day and sleeping at lower points at night. Taking an extra day to tackle the mountain also helps. Success rates are higher on longer, slower climbs.

That same strategy is also useful when it comes to investing. With investing, people dream of getting rich quickly. This seldom happens. People who take extreme risks often lose their shirts. Even if their dream comes true, they can lose their gains just as fast. I’m sure you’ve heard the stories about professional athletes and lottery winners. Their sudden wealth can disappear as quickly as it appeared—unless they have a long-term plan and stick to it.

Don’t be greedy

It was midnight on the sixth day when we began our summit hike... 

We made it up to Stella Point (18,885 feet), at sunrise. Our guide listed our official summit time as 6:00 a.m. The previous six hours spent in the dark while gaining 3,000 feet were intense. Climbers who are able to make it to Stella Point, often continue on to Uhuru Peak (19,341 feet), a more gradual climb. But we were good at Stella. The thought of an extra two hours of climbing just to say we’d climbed an additional 456 feet wasn’t that important to us. We had the sun, some hot cocoa, and were ready for the descent.

Too often, investors go for every last dollar of profit they can squeeze from an investment. But if you’re holding a nicely-appreciated investment that’s trading at a high valuation, it’s ok to sell it and look for lower-valuation investments. All else being equal, lower-valuation investments offer higher return potential than higher-valuation investments. Oftentimes, investors seeking that last dollar would have been better off by taking profits sooner.

For us, the decision to stop at Stella Point and begin our descent proved to be fortuitous. Our day ended 12 hours later at 6 p.m. We were at 10,000 feet (9,000 feet lower than the summit). Had we taken an extra two hours to reach the top, we would have arrived at camp well past sunset. That would have created a few logistic issues for many people on our team. And then there was the fact that we’d been struggling with extreme fatigue and dehydration since the afternoon. That day, while exhilarating and rewarding, was one of the longest days of our lives. And that was without the additional time it would have taken to hike to Uhuru Peak.

Our journey was filled with both breathtaking and scary moments, and we overcame obstacles that maybe we shouldn’t have been able to overcome. We were fortunate to be with experienced climbers and guides that kept us on target, which is certainly relevant to investing. To be fair, I believe we were blessed with a certain level of naivety, although I wouldn’t necessarily tie that lesson to investing!

For me, the real lesson from climbing Kilimanjaro was to remind me of the importance of maintaining focus and discipline—of having a plan and sticking to it despite the obstacles. And that’s a great strategy to have when investing.

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Prior to implementing any investment strategy referenced in this article, either directly or indirectly, please discuss with your investment advisor to determine its applicability. Any corresponding discussion with a Bedel Financial Consulting, Inc. associate pertaining to this article does not serve as personalized investment advice and should not be considered as such.

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