Reflections on The Rational Walk's tenth anniversary
“Life is divided into three periods: past, present and future. Of these, the present is short, the future is doubtful, the past is certain.”
Think back to your childhood days. Many people feel like time passed by very slowly during their youth. The prospect of finally turning sixteen and getting a driver’s license seems impossibly far away to a thirteen year old. But time seems to speed up as one gets older, to the point where a few years feels like nothing at all and a decade is only a moderately long period of time.
This website was launched ten years ago, and it does not seem like that long ago even though that span accounts for about 22 percent of my life up to this point. However, much has changed. The economic climate of February 2009 was the polar opposite of the environment we find ourselves in today. The economy was in the depths of the worst recession since the 1930s and stock prices were close to reaching their nadir, although none of us knew it at the time! Morale throughout the United States was very low, consumer confidence was non-existent, and few thought conditions would improve anytime soon. No one envisioned that we were on the cusp of a decade-long bull market that, despite nearly ending at the end of 2018, continues to this day.
When I started this blog ten years ago, I did not envision that it would still be active a decade later and I did not really have much of a vision of what it would turn into. I knew that I wanted to write about investing in general and I had some work on Berkshire Hathaway that I wanted to share with others. The stock market was down sharply and my portfolio was no exception as I tried to cope with the market meltdown. But, in general, I did not have any kind of master plan for how the site would evolve over time.
What surprised me about blogging is that it became addictive quickly. I received some positive feedback from larger sites such as Guru Focus and Seeking Alpha that wanted to syndicate my work and I ended up writing nearly every day. I wrote 279 posts in 2009 and 330 posts in 2010. Although there were many book reviews and longer articles on specific companies, for the most part I was writing about “current events”. I did not initially care too much about site traffic or monetizing the site but I soon started to watch traffic statistics and felt pressure to post frequently to “keep the numbers up”. When you write about current events, your work is relevant for a short period of time. You see spikes in website traffic and then … nothing.
Nassim Taleb has written about the “Lindy Effect” which can be applied to the life expectancy of the written word. The basic premise of the Lindy Effect is that the future life expectancy of certain non-perishable things is proportional to their current age. For example, a book that has been in print for fifty years and has retained wide readership has a much longer future life expectancy compared to a book that has been on the New York Times bestseller list for a month. Ideas expressed in a book that has survived for 100 years will have a still longer life expectancy, and so on.
The vast majority of my writing, whether about current news or the quarterly results of some company I was following, had a very short life expectancy. Although the content would remain accessible as long as I paid to keep the site hosting plan active, the relevance would soon dwindle and no one would read it. There is nothing wrong with sites that provide “news”, but such content will quickly lose relevancy.
Perhaps the exception to the short shelf life of my writing was the work I did on Berkshire Hathaway and published in the form of a long report. Due to the historical perspective of the report, there are still people who occasionally download it even though the information is now many years old. However, even this work is not “Lindy” in the sense that no one will have any interest in it in fifty years.
The frequency of my writing fell after early 2011 as I decided to devote more time to my own investing work, but I still posted occasional content and there were years of greater activity such as 2016 and 2017. However, for the most part, the site became an occasional endeavor after 2011. It was unsatisfying to be on a self-imposed “treadmill” of writing a large number of articles with a short shelf life.
I have great admiration for sites such as Farnam Street where nearly all of the content will be highly relevant even fifty years from now. It seems more satisfying to write about topics that have some permanence. When I have written content such as this article about Marcus Aurelius, the text remains as relevant today as when it was published. I was also very surprised when instructional articles, such as this one regarding how to read 10-Ks, proved to be very popular over longer periods of time. Providing tips on reading SEC documents isn’t going to have the staying power of Marcus Aurelius, but such articles appear to serve a useful function for many readers.
Perusing my archive, I see hundreds of articles that have no permanence and a just a few that might have a longer life expectancy. It is likely that future articles will focus more on topics that will have more permanent appeal and less on current events. A decade is a reasonably long period of time, and a writer’s interest is bound to change over that length of time. I am still interested in investment topics, and always will be, so book reviews and articles on broader investment topics are likely. In addition, I have an interest in personal finance, especially the massive problem of financial illiteracy in America, and would like to focus more in that area. Finally, Charlie Munger’s work on worldly wisdom has been an inspiration and I plan to try to add some value in that area. Life is about more than investing, narrowly defined, but the great thing about investing is that the more worldly wisdom we absorb, the better we perform as investors as a result.
I am not planning to write many articles about specific companies in the future. One of the great things about the value investing community is that investors are often generous about sharing their best ideas. However, going public with ideas has many very serious problems. Most importantly, good ideas are very rare and valuable. As an investor, if you have an actionable idea, you naturally want to act on it for your own account. When you also write about it, you are naturally biased and can fall prey to numerous cognitive biases that could sabotage your position and hurt your financial results. If you make your living from investments, that can be a serious concern.
I would like to thank readers of The Rational Walk for spending some of your valuable time on the content here. Seneca wrote that “nobody works out the value of time: men use it as lavishly as if it cost nothing.” Your time is valuable and the fact that the site has attracted nearly 1,200 email subscribers and a similar number of RSS subscribers is a great compliment. Those are small numbers in the world of online publishing but it is still satisfying to hit the “publish” button and know that a couple thousand people might decide to read what I have written.