Winter is here, and you should be happy.
Getting the most from summer means surviving frost.
It’s easy to take for granted 80-degree days if you dont suffer through some bone-chilling ones.
The same principles apply to gardening, which is a metaphor for investing and life.
This year, I decided to explore winter-sowing. When you winter sow seeds, you don’t force germination to occur. You expose seeds to cold, moisture, and time, trusting that they will sprout when conditions are right.
Cold exposure is a feature, not a bug, of winter sowing. Many native seeds require freeze-thaw cycles to break their dormancy. This process is called stratification.
First, in the fall, I collected various seeds from my garden, labeling and storing them in plastic containers.
Next, I built mini-greenhouses from plastic milk jugs and some salad containers, leaving an opening on top for rain and punching holes in the bottom for proper drainage.
When this was complete, I brought them outside to let nature run its course.
Once this process is complete, the gardener steps back and waits. It’s impossible to micromanage when or how each seedling sprouts.
Investors can draw many parallels from this process.
Markets reward time in the market, not constant trading. Investors who feel compelled to “do something” during every bout of volatility often undermine the power of compounding. Like seeds, capital germinates on its own schedule.
Just like the onset of winter is the price for a flourishing spring garden, investors must withstand a risk premium for owning stocks. You can’t make money if there isn’t a degree of discomfort. Market drawdowns, recessions, and volatility are akin to an ice storm for the average investor.
Like winter sowing gardeners, investors need patience and the understanding that capital exposed to volatility and guided by a sound process grows best when a hands-off approach is an integral part of the process.
My colleague Barry Ritholtz sent me this post Thin Desires Are Eating Your Life.
It discusses why thin desires reproduce themselves without any remainder. Scrolling on social media is one example.
Thick desires are transformative.
You’ll spend an afternoon doing something that cannot be made faster, producing something that you could have bought for four dollars. In the process, you’ll recover some capacity for patience that the attention economy has been methodically stripping away.
Gardening and investing are prime examples of thick desires that provide lasting impact.
Compounding capital, like growing plants, can’t be hurried. A sound process doesnt guarantee success. It simply increases the probability of it occurring.
I have no idea if all of these seeds I planted will bloom. I suspect there will be enough to make this whole journey worthwhile.
The same applies to investing. Properly diversifying will create more winners than losers and reward patient investors.
The journey is what it’s all about.
Things that provide transformational change are like that.
Everything else is desire for desire’s sake.
Choose accordingly.
