Some races end with the runners covered not only in sweat but also in mud. Chris Hill recently hosted such a run, and today he shares a lesson he learned from another runner and how it applies to investing in stocks.
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This video was recorded on November 24, 2021.
Chris Hill: We are Wednesday, November 24. Welcome to Market Foolery. I am Chris Hill. Just me today, recording a bit early because I’m actually on the road to Boston driving this Thanksgiving year. In the days before, we would take the plane and rent a car to get around. But given all of the talk we’ve had about the airline industry over the past few months on this show, as well as the rental car industry, we figured we’d only deal with the conduct. If you are traveling today, I hope everything is going well for all of us. Whatever your Thanksgiving travel dates are, I hope all goes well. If you’re outside of the United States and it’s not your country’s tradition to celebrate Thanksgiving Thursday with things like turkey, stuffing, mediocre NFL teams playing against each other, I hope you will always enjoy a good meal in the company of others.
Thursday morning I’m going for a 5 km run with some of my cousins. I’m taking warm clothes because it’s going to be in the thirties – because it’s Boston at the end of November. But it will be the last race I will do this year. However, I want to tell you about a race I did a few weeks ago because it is about investing in stocks. I ran a half marathon in Washington DC It was on this path that starts from Georgetown near the university of the same name, and it goes west towards Maryland. The path is not paved, it is a dirt road. I’ve done a bunch of races over the past five or ten years on this course. I like them in part because they are just basic. There are water points along the way, but that’s it. There’s no food, music, or a cheer section – it’s very straightforward. Again, it’s a dirt road.
I ran races on this course after it had rained, and there are puddles here and there, but it’s not really a big deal. The path is approximately 8 feet wide. So if there is a puddle on the right side, you just move to the left. Puddle on the left, you go around just to the right. You have to stay on the path though, as for most of the route there is nowhere to go. On one side is a canal, and if you take a full step in that direction, you will be in the water. On the other side is an embankment, and if you take a step in that direction, you’re going to hurtle down a hill. We must therefore stay on the path.
Now that half marathon came after it had rained in DC for over 48 straight hours. We had about two and a half days of rain, and a few hours before the start of the race, it stopped. You can probably guess what the path looked like after all that rain. Not only were there puddles, but for the first time there were puddles that you couldn’t avoid as they crossed the entire way. There was no way around these puddles, you just had to walk through them. Now when I go for a run I have my headphones on, listen to music, and my brain is, to put it charitably, incapable of deep thoughts. In fact, forget the deep thoughts – my brain is incapable of connected thoughts. My brain is like the Larry King Journal column.
For those of you of a certain age, you know what I mean. For those of you under 50, Larry King was a world class interviewer, first on radio, then on television, and for about 20 years he wrote a weekly column for the newspapers. But unlike all the other columnists, who only have one subject for the entire column, Larry King would simply write a series of non-sequiturs. It was just his thoughts about everything. It would be things like: Tom Hanks should get an Oscar nomination every year, no matter what. The only thing better than Oreos are Oreos soaked in milk. Dude, they sure don’t make them like Frank Sinatra anymore. It would be like that for the whole column. I do a race, my brain works like that, only I look at the scenery, then the clouds, then I notice the shirts of the other runners, whatever. It’s just a series of simple thoughts. A few miles into the race there were these two guys about 15 feet in front of me. They both wore gray shirts, black shorts and white socks. And I looked at them, especially their socks, and the thought that came to my mind was, “These guys have mud on them.”
Later in the race, somewhere in the second half, a woman walked past me on my left. I noticed the bright blue shirt she was wearing, and I looked at the white socks she was wearing and I was like, “She’s got a lot of mud on her. When I finally crossed the finish line, I leaned down to catch my breath, and for the first time, I looked at my own legs and feet. As you can imagine there was a lot of mud. My shoes were covered. I no longer wore white socks. I was now wearing muddy socks that had little bits of white noticeable, and I just laughed at myself that at no point during the run did I put two and two together, and realized that what happened to everyone also happened to me. One of the other runners I had noticed earlier in the race was a gentleman with that thick tuft of white hair. He was clearly older than me. If I had to guess I would say he was easily in his late sixties, probably early sixties. At one point after crossing the finish line he did too, and we ended up close together by this table that had water and Gatorade. We had the usual little runners’ conversations after a race like, ‘Hey, good run’, ‘I said something like,’ I’ve done this class a bunch of times, I’ve never seen such a mess before. He laughed and he said, “It was all that rain, but that’s okay, it’s the mud that makes us. I thought about it for a second, and I asked him, “What do you mean?”
And he said, “That’s what makes us runners. Some people prefer to go to a gym or a yoga class, and that’s okay. Exercise is good for you. People should be exercising however they want, but here we are, even with all this mess. We run the race even with the mud. “I thought about it, and nodded, I said something like that,“ I guess it wears off after a hot shower. ”He said,“ Yeah, it always washes out. But the same for everyone, it’s the mud that makes us runners. “
He gave me a little wave, turned around and continued on his way. So I walked to my car, which was about a half mile away. To get there I walked through a beautiful neighborhood in Georgetown and sure enough at one point I saw a few people wearing yoga mats as they seemed to be heading to some class. And on the way back, I thought more about what this gentleman had said, and realized that what he said applied not only to runners but to equity investors.
Because for us mud is the red in our wallet. These are the stocks that have taken a hit. Maybe they’ve descended from their peaks, or maybe they’re completely underwater. And just as running isn’t for everyone, neither is investing in stocks. Some people just want to buy an index fund and add things to it over time – and by the way, that’s great. You can build your financial independence this way, it’s great. Some people claim that they don’t have any mud at all. I noticed this especially on social media, and I’m sorry, but I don’t believe it for a second.
It would be as if after my run a few weeks ago someone who looked immaculate from head to toe tried to tell me that they had run the same half marathon as me. No one ran this race without mud. Any runner who says otherwise is lying. Just like anyone who tries to tell you that they are an investor in stocks and have never had a drop in stock, they are lying. And unfortunately there is a whole other group of people who have completely come out. Maybe they bought a stock once, it fell 20%, and they just didn’t have the guts to do it. They just couldn’t cope with the mud. But we are equity investors. We signed up for it. And I’m here with you, besides, I absolutely have mud in my wallet. But that’s why we are diversifying. This is why we are strengthening our heritage. That’s why we let our winners run. Because that’s what washes away the mud. So don’t be afraid of it. That’s what we signed up for. It’s the mud that makes us. Have a good Thanksgiving. See you Monday.
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