The Porcupine Story
The story goes that it was a particularly harrowing time in porcupine land. The winter was severe and the porcupines were finding survival difficult. They were freezing to death.
That’s when they held a meeting to decide on a course of action. As they got together to discuss their survival strategy, they discovered that just by being in close proximity with each other they were able to feel warmer and protect each other.
Being closeted together meant that their bodies generated heat which helped keep everybody warm. So they found they could survive the cold by just staying together!
But there was a problem.
As they moved closer, they found each other’s quills to be a bother—they poked and hurt.
Feeling the discomfort, some porcupines decided to avoid the pain from the quill pokes and moved away.
And as they ventured out on their own, the cold got them and they died.
Soon better sense prevailed and the porcupines realized it was better to stay together and survive rather than go out on their own and die.
Getting poked by the quills of porcupines that were close to them seemed like a small price to pay for survival.
This story has a great lesson for investors.
1) Investors afraid of market volatility redeem their investment because volatility seems to hurt them. Only if they could tolerate a little volatility their lives would be much better off in due course but their fear gets the better of them and they hurl themselves into a bigger crisis.
2) Another lesson investors can draw from this story is of leaving their Advisors and practicing self advisory or self medication whatever one may like to call it because the small fee that they have dispense seems to hurt them. They eventually venture out on their own and with no Advisor to manage their irrational and emotional behaviour, they too fall prey to greed and fear and lose their way.