A lesson in hostility to investors | Smart Change: Personal Finance

Some races end with runners covered not only in sweat, but also in mud. Chris Hill recently ran one of these races, and today he’s sharing a lesson he learned from a fellow runner and how that applies to investing in stocks.

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This video was recorded on November 24, 2021.

Chris Hill: It’s Wednesday, November 24th. Welcome to Market Foolery. I’m Chris Hill. Just me today, I’m scoring a little early because I’m actually on the way to Boston, driving this year for Thanksgiving. In The Before Times, we were flying and renting a car to get around. But given all of the discussions we’ve had about the airline industry over the past few months at this show, as well as the rental car industry, we figured we’d just be dealing with the drive. If you’re traveling today, I hope it goes smoothly for all of us. Regardless of your Thanksgiving travel dates, I hope it goes smoothly. If you’re outside the United States, and it’s not a tradition in your country to celebrate Thanksgiving on Thursdays with things like turkey and stuffing and humble NFL teams playing against each other, I hope you’ll continue to enjoy a good meal in the company of others.

Thursday morning I will be doing a 5km race with a few of my cousins. I’m packing some warm gear because the temperature will be in the 30s – because it’s Boston in late November. But this will be my last race this year. However, I would like to tell you about the race I did a few weeks ago, because it is about investing in stocks. I ran a half marathon in Washington, D.C. It was on this track that begins in Georgetown near the university of the same name, and heads west toward Maryland. The road is unpaved, it is a dirt road. I’ve been in a bunch of races over the past five or ten years on this course. I like them in part because they are only basic. There is water that stops along the way, but that’s it. No food, music or cheery section – very low frills. Again, it’s a dirt road.

I did races on this course after it rained, and there are puddles here and there, but it’s not really a big deal. The track is approximately 8 feet wide. So if there is a puddle of water on the right side, just go to the left. Pool on the left, you just shrug to the right. However, you have to stay on the road, because for most of the course, there’s nowhere else to go. On one side is a channel, and if you take a full step in that direction, you will be in the water. On the other side is a bridge, and if you take a step in that direction, you will roll down the hill. So you have to stay on the road.

Now, this particular half marathon took place after it had been raining in the capital for more than 48 hours straight. We had about two and a half days of rain, and a few hours before the race started, it stopped. You can probably guess what the track was like after all that rain. Not only were there puddles, but for the first time ever, there were puddles of water that you couldn’t avoid as they crossed the entire path. There was no avoiding these puddles, you just had to pass through them. Now, when I’m doing a race, I put on my headphones, I listen to music, and my brain is unable to think deeply. In fact, forget deep thoughts – my brain is incapable of that Connected Thoughts. My mind is like a Larry King newspaper column.

For those of you of a certain age, you know what I mean. For those under 50, Larry King was a world-class interviewer, first on radio, then on television, and for nearly 20 years, writing a syndicated weekly column for newspapers. But unlike every other columnist, who has one topic for the entire column, Larry King has written a series of non-series. It was just his thoughts about everything. It would be things like: Tom Hanks should get an Academy Award nomination every year no matter what. The only thing better than Oreos is immersing Oreos in milk. Oh boy, they definitely don’t make them look like Frank Sinatra anymore. The same will be the case for the entire column. I’m running a race, my brain works like this, I just look at the scenery, then the clouds, and then I notice the shirts of the other racers, whatever. It’s just a series of individual thoughts. After a few miles of racing, these two guys were about 15 feet ahead of me. They wore gray shirts, black shorts, and white socks. And I looked at them, especially in their stockings, and I thought in my head, “These guys have mud on them.”

Later in the race, somewhere in the second half, a woman passed by me to my left. I noticed the bright blue shirt she was wearing, looked down at the white socks she was wearing and thought, “She’s got a lot of mud.” When I finally crossed the finish line, I bent down to catch my breath and, for the first time, looked at my legs and feet. As you might imagine, there was a lot of mud. My shoes were covered. I no longer wear white socks. I was now wearing muddy socks with little bits of white in them, and I laughed to myself because at no point during the race had I put two or two together, and I realized that what was happening to the others was happening to me too. One of the other runners I noticed earlier in the race was a gentleman with a thick shock of white hair. He was clearly older than me. If I had to guess, I’d say he was in his late 60s, maybe early 70s. At some point after I crossed the finish line, he did too, and we ended up standing very close to each other next to this table with water and a Gatorade. We’ve had the usual little talk of runners after a race like, “Hey, good run,” “Congratulations,” “How did you feel there?” , that kind of thing. I said something like, “I’ve done this course a few times, and I’ve never seen a mess like this before.” He laughed and said, “It was all that rain, but it’s okay, it’s the mud that makes us.” I thought about it for a second and asked, “How do you mean?”

He said, “That’s what makes us runners. Some people like to go to a gym or a yoga class, and that’s fine. Exercise is good for you. People should exercise as much as they want, but we’re here, even with all that mess. We run the race even in the mud.” . I thought about it, nodded, and said something like, “I think it washes after a hot shower.” He said, “Well, it always washes. But it’s the same for everyone, it’s the mud that makes us runners.”

He gave me a small wave, turned around, and went on his way. So I walked to my car which was about a half mile away. To get there, I walked into a nice part of Georgetown, and sure enough, at one point, I saw two people holding yoga mats as they seemed to be on their way to a class of some sort. On the way home, I was thinking more about what this guy had said, and I realized that what he said applied not only to runners but to stock investors.

Because clay for us is the red color in our wallet. Stocks are taking a hit. Maybe they’re low from their high, or maybe they’re completely underwater. And just like running isn’t for everyone, so is investing in stocks. Some people just want to buy an index fund and add to it over time – and by the way, that’s great. You can build financial independence this way, which is great. Some people claim that they don’t have any clay at all. I especially noticed this on social media, and I’m sorry, but I can’t believe it for a second.

This would be as if after my race a few weeks ago, someone who looks pure from head to toe tried to tell me that they ran the same half marathon that I did. Nobody ran this race without mud. Any runner who says otherwise is lying. Just like anyone trying to tell you that they are an investor in stocks and have never had a stock go down, they are lying. And unfortunately, there is a whole other group of people who are completely out. Maybe they just bought one stock once, it’s down 20%, and they didn’t have the guts to do so. They just can’t handle mud. But we are investors in stocks. We have registered for this. And I’m there with you, by the way, I have mud in my purse. But this is why we are so diverse. This is why we build our property. This is why we let the winners run. Because that is what washes away the slime. So don’t be afraid of him. This is what we recorded. It is the clay that makes us. I wish you a great Thanksgiving. See you on Monday.

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