Daydreaming from Traffic Jams to Value Investing
Cheech is back once again with his quirky thoughts on how he relates his daily life to the very things he is passionate about. Hope this piece is a meaningful one for you to reflect on. Enjoy!
I had been thinking of this traffic jam-value investing analogy for a loooooooong time now.
And I kid you not, as this scenario had been simulating or theory-crafting in my head for probably 2 years now, seeing how that has been the amount of time I have been working since my graduation.
This thought culminated day by day as I drove back from work for 1 hour on the same roads every single day…
And mind you, this does not happen throughout the whole journey back home! (just in case you were wondering how I sustained this mere thought in a 1-hour drive 👀)
But rather near the end of the journey, say 10 minutes away from where I stay.
Curious to know why?
Read on! 😉
Le Situation
So, imagine there are only 2 lanes on the road. You are on the one that is moving slowly.
The other lane somehow seems to be clearing out pretty fast for some reason.
To help you picture this, refer to my Picasso painting (and yes, it is sketched on Paint) below 😏
Fearing of being stuck in the ‘slow’ lane too long, you then shift to the other seemingly ‘faster’ lane, realising that the moment you shifted, a bottleneck has already formed at the front.
After going through that same road countless of times and making the emotional mistakes of switching to ‘fast’ lane many times, I realised that most of the time, ‘slow’ lane will always get me home faster.
Why is that so?
Le Epiphany
Well, seeing how the road I was on had a hump/bridge area, I capitalised on that position during a traffic ham to observe what is happening at the front.
Once again, using the artist in me, I paint a picture telling a thousand (OK, maybe not that many but you get the gist) words.
Turns out the ‘faster’ lane actually had cars going out through an exiting lane. And that caused the initial fast clearing of cars.
However, after the exiting lane is no longer part of the pathway, there is a major bottleneck due to cars from the original ‘faster’ lane and the newly entering lane merging together into the very first 2 lanes which we started with earlier.
‘Slow’ lane, however, was just cruising along with no lane interruptions whatsoever, albeit a slow start.
Now, I know you would be confused with my explanations, and hence I sacrificed some precious time to make sure you fully understand what is going on here.
Le Analogy Moment
Somehow, just somehow, my brain lit up at that point in time!
It all started to piece together now, as to why my brain kept wanting to relate all these small bits of visual stimuli during that opportune traffic jam on top of the ramp position of the highway.
I roughly knew how this analogy can be penned down into words, but rather due to work fatigue or other worldly distractions, I either forget or chose not to pen them down due to laziness. (c’mon, we writers deserve a good break too 😛)
However, on this very day where I started this article, I then decided to write this piece down with all the might and perseverance which I can muster, leading me to conclude on 2 sides of the coin (or in this case, traffic) here:
‘Slow’ lane peeps:
These are basically investors who have done their homework beforehand and know with strong conviction how the outcomes will sorta turn out. Without any doubt, they overcome temptations and market noises to stay in the game.
‘Faster’ lane peeps:
These are investors who have not done any homework beforehand, but rather just follow whatever the market/analysts dictate, without their own evaluation of the currently invested company at hand. They bow to inner emotions, and hence their susceptibility to market prices and noises.
So, there you have it!
This is what happens when you have a super long drive back home very single work day!
I hope this brought a fresh perspective on how you would observe value investing.
To more meaningful writings ahead and serendipitous observations!
See you next time, Cheechoritorians~
About the author:
Cheech Sia is your one-of-a-kind engineer based in Selangor, Malaysia. He is also a super enthusiast when it comes to areas of personal development and financial education. Connect with Cheech on LinkedIn, Facebook, Youtube and Instagram.
