To me, the Tortoise embodies what makes a successful investor. Not only moving slow but surviving. Have you ever seen film of a Tortoise hunting down its prey in "Plant Earth"? No you havent. Nobody wants to watch a turtle slowly chew leaves. Its always, "How many baby tortoises are going to survive not getting eaten by 3 different animals on the way off the beach right after they hatch". The tortoises that do survive, live longer than most animals on earth and they do it solely through defense.
Just like a tortoise, an investor's main tool of survival is defense; proper risk management. They must survive through bear markets and those who do are able to reap the rewards of a bull market. Most traders will blow up an account before they fully grasp this concept, myself included.
Move slow to move fast
In my years working with clients and then coaching others, I learned quickly the importance of slowing down.
Here is an example of a constant struggle I dealt with when coaching new advisors:Would you rather be:
Advisor 1: See 25 potential clients and end up working with 5
Advisor 2: See 10 potential clients and end up working with 8
The answer is obvious and when I evaluated the habits of each type of person It always came down to 1 variable:
Time spent with the client.
Advisor 1 would try to see as many people as possible, throw shit at the wall and hope it stuck.
Advisor 2 spent quality time with the client and established a plan addressing the clients needs and concerns.
When the client had second thoughts or was approached by a competitor, Advisor 2 was able to speak from confidence on the plan created and instill confidence in the client; client retained.
Advisor 1 lacked confidence and had no strong foundation to fall back on.
Investing is no different
You must move slow to move fast. You must take your time to create a strategy and plan out each investment ahead of time so when the market moves in an unexpected way, as it usually does, you have the confidence to make the move you planned instead of letting your emotions take over.
Will buy at a whim hoping the market moves in their favor. When the market does, greed takes over and they hope for further appreciation only to see the trade move back on them. When the market moves against them they may sell immediately only to see the market reverse back in the direction of their trade. Or even worse, the market moves against them and they continue to hope it will go back in their favor as their equity dwindles away. They dont take the time to document their trades and they continue to make the same mistakes.
Plans out which markets they want to trade. They know at what price they are a buyer and what price they are a seller. Once a trade is entered they know at what point they will exit if the market moves against them and they know at what price they will take profit. Their risk is established ahead of time and they are comfortable with it. They document their plan and record results so they can learn from their mistakes and successes. When the market moves in an unexpected way they have a plan to fall back on to give them confidence to stay the course. Their stop loss exits them at the point at which the trade is invalidated and their take profit order secures gains at the planned out price.
The Tortoise and the Hare
The two scenarios above are different ways of telling the story of The Tortoise and the Hare and there are endless versions of this story in our everyday lives.
The lesson is simple: move slow and steady with a focus on the long term results instead of having tunnel vision for the short term. This is critical to survive in any career, especially in trading.
The Tortoise is a constant reminder to slow down, have a plan and survive. This bear market wont last forever. Will you be around when the bull charges in?