The salty wind blew my hair, and the gentle sound of waves filled my ears as my wife, Anne, and I watched pairs of Bermuda Longtails. Their snow-white plumage gleamed in the sunlight, as they danced with an elegant grace against the backdrop of an azure sky and a turquoise sea. Watching from our patio, Anne and I were mesmerized.
Care-giving has kept us home for most of the last couple of years, so it was a delight to get away from the hustle and bustle of the office, for five days of “light therapy” in the Bermuda sun. It was a refreshing change – a moment to gain perspective. The Longtails had a lesson to teach me.
Here’s something you don’t know about me, I’ve always loved birds. In fact, as a boy I thought I’d become an ornithologist. That dream was replaced by others but I’ve always maintained my fascination with birds. As Anne and I watched the Longtails, I found myself inspired by their equanimity and grace. Whether they were riding fair winds or battling gusts, with their 3 foot wingspan they just kept on flying, revelling in the changing wind. They have a lesson for investors.
It struck me that there is a parallel between the flight of the Longtails and the financial world. Being ocean faring birds, the Longtails encounter their share of sudden storms and squalls. In the financial world, these storms are what we call “long tails” – rare but impactful events that significantly shake up the market. Today’s headlines of recession risks and banking crises are “long tail” events. The Longtails know how to cope with “long tails” – avoid the worst and ride them out.
I also like the fact that Longtails are monogamous – mating for life. We often saw pairs flying together seemingly celebrating the wind that blows both fair and foul. Like the birds, investors don’t get to pick the wind but we do get to pick our partners – together we just have to navigate it and keep on flying. I often return from trips with a deep sense of gratitude. Thank you for allowing me to be your wingman! Know that I’m committed to help you navigate the “long tails”.
Yours faithfully,
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