The world of sports teaches you many life lessons. Trying to beat my own 5K time recently, I wondered if I was approaching this the right way. Was this a sprint? Did I take up running to get to this personal record time? Or was it a marathon? i.e Did I take this up as a lifestyle or a lifelong habit? I realised it was the latter and therefore it would be imprudent to fall prey to the GoodHart’s Law. I might not want to let this measure become a target.
Sprint vs Marathon is a useful mental model for thinking about various situations both in life and investing. A sprint could be any activity that requires you to expend maximum energy for short bursts of time. A marathon on the other hand needs regulated energy expenditure, lest you could end up emptying your tanks too soon. Here’s what I mean.
Life is a confluence of a variety of forces. While the influence of the invisible hand of luck and uncertainty is unavoidable, the decisions you take and how you take them plays an important role in creating an environment which puts the odds in your favour.
What it is that you want to do? We all have personal and professional goals in life that we want to achieve. But most of us hardly take a step back and think if they road to that goal is a sprint or a marathon.
Is it a short-term goal? Like learning a new language or a new skill for example. In this case it might be best to sprint towards the finish line. Put the reps in, be relentless, show up with consistency and get there.
Is it a professional/personal milestone or a life goal? Getting fit or being a successful investor for instance. You might want to treat these as marathons. Make tiny improvements and adjustments for a long period of time, take pitstops to recoup your spent energies and get closer to the finish line until it becomes a habit. Yes, you want to run with all your might, but treating a marathon as a sprint forces you to take risks that stack the odds against you and reduce your chances to ‘stay’ in the race.
At times it could be a combination of the two. Being an entrepreneur for example. Starting the business could be a sprint. You move fast, fail faster, learn your lessons and do it. Taking your business from 0 to a 100 is a marathon. Now your approach is focussed on making incremental progress, thinking in years not in days and compounding your success by implementing the lessons acquired during your journey. How you approach your goal could be backed by what type of race you’re running. The sooner you know it, the better.
I’ve come to like the idea of breaking up marathons into a series of sprints. Periods where you go all in, with relentless focus and get to the first finish line, followed by periods where you recover, taking in what worked and what didn’t in the sprint, and putting it to work in the next one. All the while still ensuring a steady state progress is made between the sprints.
You look at how sprinters and marathoners are built – explosive bursts of speed vs endurance and continuous progress. Why not shape your mindset and mental capacities in the same way?
If you thought luck and uncertainty has an overarching influence in life, in investing, it is even more so. But here too, how to take decisions and knowing what race you’re running goes a long way in making sure you get to your finish line.
Everyone’s an ‘investor’ today. Technological innovation has removed any friction whatsoever for us to start investing. But before we invest, we might as well take a step back and ask ourselves why are we making this investment? What game are we trying to play? Is it aligned with the goals we’ve set for ourselves?
Some people invest with a ‘punter’s’ mindset. For some it’s a game. They trade or invest for fun. It is a sprint. They get in, go hard and get it out of their system. But they better not risk their lifesavings in the game they’re playing.
Some invest to build wealth for their future self and/or fund their financial goals in life. For them, this is a marathon. This race involves patience, ability to survive for a long, long time and let compounding to work its magic.
I find myself in the latter bucket. As Ben Carlson talked about in one of his posts, there are no easy riches here, you don’t get to become rich overnight. This fact in itself is hard to digest, especially when you see meme coin and meme stock millionaires posting their gains on social media. But knowing that you’re investment philosophy is line with the race you’re running is a game changer. It helps you avoid checking your brokerage account every few hours. It allows you to not let your emotions and moods swing with the gyrations in the market. It makes sure you’re not the guy who:
In life, convert marathons into series of sprints – periods of maximum effort where you aim for the hills, not the summit. It allows you to fail fast and fail better, reduce your error rate and incorporate feedback. Having a mindset prepared for a sprint when it is one, and for an endurance testing marathon when you find yourself in it could go a long way in keeping you in the race and ensure survival.
While investing, create a process which aligns your goals with how you invest. What are you making this investment for? What is your time-horizon? are you running a 100m dash looking to profit from the next best opportunity? If your goals aren’t aligned with how you invest, you are stacking the odds against yourself.
Think in decades, execute in weeks and months. Figure out what race you’re running and run accordingly. Also, it is OK to build wealth slowly.
Until next time,
The Atomic Investor