The Alpinist
Shared traits between Alpinists and Investors
A few weeks after sharing my own mountain climbing challenge, I recently watched a mountain climbing related documentary called The Alpinist. The Alpinist is a captivating documentary that explores the life of Marc-André Leclerc, a fearless solo climber renowned for taking on some of the world's most daunting alpine walls alone and without prior announcement. The film vividly captures his audacious climbs and free-spirited approach.
For those unfamiliar with alpine climbing like me, it's a form of mountaineering that involves employing various advanced climbing techniques, such as rock climbing, ice climbing, and mixed climbing, to ascend typically large routes (e.g., multi-pitch or big wall) in an alpine environment.
Marc is a legendary Alpinist. While watching, I found myself deeply admiring his courage and skills, while also experiencing several unexpected "aha moments" from his few words (as most of the time, he is climbing). Surprisingly, his views on mountaineering shared some similarities with my understanding of investment. I'd like to share three of them: environment, patience and toolbox.
Environment
The most memorable part for me was when he completed the first winter solo ascents of Torre Egger in Patagonia in 2016.
During the climb, he mentioned,
"You can control yourself, but not the environment, such as weather and mountains, so you must constantly assess the situation and know when to advance or retreat."
When he attempted Torre Egger for the first time and was close to reaching the summit, he decided to descend due to an approaching blizzard.
This is very similar to investing, where interacting with the environment is crucial to the final outcome of an investment. One need to constantly monitor all important aspects of the environment relevant to an investment, including but not limited to the company itself ("the mountain"), the industry, capital markets, and the macroeconomy ("the weather"), as these factors can influence whether you continue "climbing" or "descend."
I elaborated on this in my article Reflections on Investing in Public Markets, discussing framework for opportunities to buy / add and framework for situations to exit / trim.
By the way, Marc successfully summited Torre Egger on his second attempt.
Patience
Marc tracks various aspects such as weather meticulously before his both attempts to climb Torre Egger, carefully observing and waiting for the right conditions.
Investing shares a similar mindset. Achieving perfect alignment of all factors for an investment is very rare, especially for exceptional businesses led by outstanding entrepreneurs. Therefore, patience becomes an essential virtue for investors. Even with great companies, securing a favorable purchase price is crucial for favorable outcomes in most cases.
Furthermore, discovery is just the first step; being able to hold and ride through is the core of returns.
Patience, including patience in waiting for entry opportunities and patience in holding, is an edge. However, not every investor possesses it. It is a scarce ability but crucial for good returns.
Toolbox
Before climbing Torre Egger, Marc spent a year preparing, traveling between peaks in the Americas and Europe, training himself to climb in various environments: rock, ice, and snow. Different environments require different gear including boots, crampons, rock shoes, and varying skills, all while maintaining the ability to transition seamlessly between them.
Similarly, in investing, there is no one-size-fits-all strategy. Investors need to be sensitive to the environment and have a diverse toolbox to adapt to different routes and environments.
Adapting investment strategy and style to different environments is essential, but not every investor or fund can effectively capture environmental changes while seamlessly accommodating multiple approaches needed. Both present challenges.
To begin with, recognizing the limitations of one's strategy is crucial. When the investing landscape shifts and your toolbox no longer fits, it requires not only self-awareness and courage to acknowledge the need for change as well.
Embracing multiple styles entails maintaining flexibility, avoiding reliance on past successes, and engaging in ongoing trail and error within manageable risks.
Ultimately, the key lies not in the method itself, but in continuously refining and evolving the approach over time.
In 2018, Marc rested eternally during a climb at the Mendenhall Towers in Alaska. I hope the mountains there are stunning and the sunsets there are breathtaking.
As always, thanks for your reading and I hope you enjoy it. Stay safe and see you next time.