Aesop's Fables holds meaningful lessons for investors...

We often first encounter the short stories of the famous Greek storyteller Aesop either as children or as parents reading to our children.

Many of the tales we attribute to Aesop may have been adapted from earlier Indian or Sumerian stories. The referral to Aesop by Greek philosophers Plato and Aristotle probably gave Aesop an attribution boost. Regardless, it means that these stories have been told for thousands of years.

Unfortunately, many of us never reread Aesop's stories. So many of these ancient tales provide guidance useful in our daily lives, just as they do for investing.

Ariel Investments, run by famed value investor, John Rogers, has a tortoise logo holding the winner's cup. "Slow and steady wins the race" stems directly from Aesop's story of The Tortoise and the Hare.

Many stock market doomsayers have called for "eleven of the last two" bear markets. In other words, they call every small market blip the next crash. They "call" the market collapse over and over again until people, smartly, just stop listening.

Such doomsayers are often referred to in the same breath as The Boy Who Cried Wolf, another of the famous Aesop tales. The boy in the story repeatedly lies about a wolf ready to pounce on the village sheep.

Eventually, the villagers stop paying attention to the boy. When a hungry wolf does show up, no one in the town heeds the warning.

Much of the financial media falls into The Boy Who Cried Wolf category. Of course, CNBC and other financial media sources could tell the world the truth: most days, when financial news reports on stock market volatility, it's typically immaterial, and smart investors should just maintain their strategy.

That kind of headline won't lead to a lot of viewers or clicks. And so, unfortunately for all of us, the financial media is built to sensationalize the most mundane of topics.

The talking heads will note how the stock market is up, attributing it to lower oil prices. The very next day, the same news channel will report that the stock market has fallen, also attributing it to higher oil prices. With adequate bravado, each headline generates attention, which is likely of little value to the intelligent investor.

Crying "Wolf!" at every turn generates an amygdala hijack in the public's emotion... and this can be detrimental to many portfolios.

Certain patterns provide leading, lagging, and coincident indicators of bull and bear markets. Our Altimetry's Market Phase Cycle analysis was built on the study of these historical patterns. Through analyzing a huge selection of data under a Uniform lens, we can understand where the economy is in the economic cycle.

However, those patterns build and fall over long periods. They are not evident in the useless up and down comments of the financial media. These are nothing more than daily blips, as the great investor Seth Klarman refers to them.

It's not always about animals... we might change our mind in our old age...

Aesop's fables most often feature animals that are personified and embody the human condition. However, they aren't always about animals. A lesser-known tale is The Old Man and Death.

The story tells of an older man burdened by a lifelong daily grind of carrying a heavy pile of sticks. In desperation, he calls on Death to take him away from his tiresome life.

When Death arrives, the man suddenly realizes the error in his request. He changes his original petition to Death. Instead, the man asks Death if he will assist him in carrying the load of sticks.

This tale is one of the original examples of the common wisdom, "Be careful what you wish for."

More specifically to our lives today, this tale cautions us to be more deliberate about what we define as "wealth." It's something we discussed last month in our essay titled "What Does Wealth Mean to You."

If we define wealth solely in financial or monetary terms, we might end up running ourselves ragged, working uncountable hours and sleepless nights just to build some extra savings. For instance, chasing high-paying Wall Street jobs like investment banking, as I did, leaves a lot to be desired.

You don't go to Wall Street to learn about how stocks are valued, or how bull and bear markets occur... or even the pursuit of a fulfilling life experience.

The salary and bonuses may be great, and the savings might allow you to splurge a bit. But these extra perks come with a cost...

The concern with a relentless pursuit of monetary wealth is that in the meantime, we might forgo valuable experiences such as time spent with loved ones or travel or philanthropic activity.

Your financial goals should be planned part and parcel with the multifaceted ways one defines wealth...

These include planned and sometimes unplanned life events, the timing of those events, how and when rest and relaxation fit into one's life, and a realization of what one defines as personal wealth and success.

Investing is a wonderful vehicle for achieving monetary wealth. Without those very personal decisions of other ways wealth has meaning to you and your family, it's impossible to determine a good investment plan.

Our Timetable Investor model discusses asset allocation repeatedly and is included in The Altimeter and Hidden Alpha newsletters.

If you haven't seen our Timetable Investor, a powerful guide for individual and family investing, along with our Market Phase Cycle for strategizing investments around bull and bear markets, I'd encourage you to sign up for a deeply discounted subscription to Hidden Alpha right here.

And whatever goals we set, we want to make sure we will be happy with what we achieve. Let's hope they really are the successes we'd want... in the event that Death shows up one day as we each carry around our own big bundles of sticks...


Joel Litman
November 5, 2021