Sometimes the best way to make a point is to… approach it from a completely different angle.

For example, consider the latest post by the incomparable Morgan Housel where he wants to say this about long-term investing:

The most important investing question is not, “What are the highest returns I can earn?”

It’s, “What are the best returns I can sustain for the longest period of time?”

But he doesn’t start with these lines. He starts instead with the world of athletics.

A big difference between professional and amateur athletes is the intensity of training. The intuition of amateur athletes is to push as hard as they can, testing the limits of their potential, maximizing what they’re capable of, grind until you’re broken, no pain no gain.

The training schedules of professional athletes – once a good coach enters the picture – tends to be calmer.

So the point Morgan makes is that professional athletes actually have a less intense training regimen than amateur athletes.

He then quotes Stephen Seiler, an exercise physiologist, who says:

[Professional endurance athletes] go for a long time at a low intensity where they can recover, and repeat it day after day. And that’s what really brings success. For the highest levels to be attainable over time, the training process has to be sustainable. At higher levels of intensity, chronic levels of stress leads to burnout and stagnation.

And then Morgan follows that up with:

Which is exactly how good investing works too, isn’t it?

He then builds on this thought with these insightful lines:

“Excellent returns for a few years” is not nearly as powerful as “pretty good returns for a long time.” And few things can beat, “average returns sustained for a very long time.”

That’s the biggest but most obvious secret in investing: Average returns for an above-average period of time leads to magic.

Morgan not only starts the post with an analogy, he also ends it with one – a cute video of a kid winning a lemon and spoon race in India (who epitomises the principle of the slow and steady approach to investing). What a lovely way to wrap it up!

#SOTD 84