Hunting is an adrenaline fuelled and adrenaline fuelling activity. Spotting the prey, the chase, and the kill could be really exciting. One should also note that hunting though exciting does not always result in a kill. In jungles the hunter and the hunted need to run faster every day to survive as it is a zero sum activity – only one of them can “win”. Also it gets tougher when there are a lot of hunters running after the same prey.
Trading is similar to hunting, it gives instant gratification, a rush of adrenaline, and the thrill of the kill. That’s also reflected in the lingo – “making a killing in the market”. Trading is about spotting market inefficiencies (spotting the prey), bringing enough resources to make a meaningful profit (the chase) and booking the profit (the kill). Profits in trading are not always guaranteed, there are many instances of failures (though we hear more about successes than failures). Trading for a large part is a zero sum game where for someone to win, someone else has to lose. Making profits in trading gets tougher as the competition increases and gets more and more sophisticated (more tools being used).
Agriculture is a rather boring activity, where one has to plan ahead for months, there is a lot of sweat and toil, there is exposure to the vagaries of weather, and waiting for things to happen. There may not by any rush of adrenaline when one is harvesting the crop, there will be joy but for a large part it may be devoid of any “excitement”. Agriculture is all about a “process” of production, there will be a lot of short term pain and uncertainty. In agriculture the odds are stacked in favour of successes in the long run – proof being that humanity continues to be fed. Agriculture when done in a sustainable manner – leaves the land and the farmer richer and hence is a productive activity (as opposed to a zero sum game).
Investing is an activity of providing capital to businesses so that they can produce goods and services and generate profits. Just like agriculture it is a boring activity – where one is planning for months if not years in advance, committing resources, and dealing with uncertainties. It is all about a “process” of generating value and capturing value – and for a large part it is also about waiting for the results as they are rarely instantaneous. Success in business usually lacks excitement, but the odds are stacked in the favour of success – proof being that most of the humanity interacts with various businesses for almost everything. For humanity to do well businesses have to do well. This does not mean there are no failures in businesses, there are a lot. But if one were to look at the industry as a whole, businesses do well and keep the wheels of the economy spinning. Investing like agriculture is a productive activity and does not need someone to loose for someone else to win. Sustainable business usually creates a win-win.
There are many who enjoy the thrill of hunting and find agriculture mundane. One should remember that one of the key drivers of success of human-kind has been agriculture. These days hunters are few and far between. Though the same cannot be said about traders, one can draw useful comparisons and conclusions from the trends in hunting and agriculture. We believe that for the people who have patience and the discipline – agriculture and investing are far surer (safer and less exciting) bets as opposed to hunting and trading.
Happy investing..