I’ve taken up long distance running in the last few years. I’m terrible at it, but who cares. If it was easy it wouldn’t be interesting. Anyhow, running long distances always struck me as a little crazy, but it’s strangely challenging, enjoyable and calming. That last part might sound strange because running for most people is anything but calm. But it’s taken me a long time to get to a point where I run calmly. And the struggle in getting there was in overcoming my short-termism.
When you run you’re constantly thinking about what’s right in front of you. What pace am I running right now? What is the terrain like right in front of me? How much longer do I have to go at this pace? Is that minor pain in my foot right now going to persist for the duration of my run? Long distance running is a series of short-term battles inside of a longer war. And when you learn to overcome these short-term issues you learn to make the war much more winnable.
I started thinking about this after reading this article in the Atlantic about runners and what they think about while they run. I can tell you from my personal experience that I do my best running when I am not really thinking about running. They cite a cool study that says:
A final thematic structure revealed three major themes that characterised the participant’s thought processes: Pace and Distance, Pain and Discomfort, and Environment.
Those are all just short-term issues during a run. I find that it’s when I don’t focus on the pain and the next quarter mile that I tend to operate more efficiently. I lose myself in deeper thought or distracted by music or podcasts and this is when I feel best because it keeps me focused on the longer-term task at hand. And this reminds me of investing in so many ways. It’s when you learn to stop obsessing over the little things that the big things take care of themselves. Of course, you have to get the big things right.
When it comes to investing you need to have a plan. Runners don’t need to be great to go long distances. But they do need to have a good plan. Do you have a fuel plan? Do you know your comfortable pace? Do you know how to ease into your run? It doesn’t have to be perfect. But it has to be perfect enough that you can stick with it over the course of the entire run. And that’s what I find with so many investors. They want the perfect plan or the best short-term plan when all they really need is a good plan that prepares them to stick with the plan.
So many investors fail because of their short-termism. For instance, many investors don’t know their pain thresholds so they pace themselves incorrectly (fail to properly diversify). Many investors focus on the wrong short-term targets like beating the market (so they chase performance and actually underperform). I could go on and on there. The thing is, I think most investors could learn a thing or two from losing their minds in some long runs. I know it’s made me a better investor.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.