Before I was an investor, I was a landscaper, and I loved that job. It felt great every day to do a bunch of hard work and see at the end that it had made the world a more beautiful place. 

Investing is nothing like that. In investing, effort does not equal outcomes and you spend most of your time thinking about how much better you could be doing. What’s more, investing done well is a game of magnitude, not frequency. The feedback loops are long and the payoffs, while potentially significant, are unpredictable and nonlinear. In other words, even if you’re a great investor you can spend most of your days making no visible progress.

Running a business can feel a lot like that too, but it has the benefit of being a bit more tangible.

None of this is meant to turn this into a woe is me piece. I have an incredible job and I love what I do as well as the people I get to do it with. Rather, it’s to say that if you want to become an investor, you have to become a person who can tolerate long periods where it seems like you are making no progress and be okay with that.

My high school baseball coach was a crazy dude. As part of our mandatory offseason conditioning he erected five railroad ties near the field and gave us five sledgehammers. He said we wouldn’t start practice in the spring until we’d hammered through all five railroad ties. 

Have you ever tried to cut a railroad tie in half using a sledgehammer?

It sucked, but we did it. We were out there before school, after school, during lunch hammering away. But I kid you not that until those ties actually buckled, it didn’t seem like we were ever getting any closer to completing the task.

That’s investing. You analyze hundreds of opportunities to find one. It’s not clear that you’re right until you are. And until you actually bank a win, it can seem like nothing good ever happens. Because when it comes to upside and capital and risk, it can always be better.

So how do you become that person without becoming a masochist? More on that tomorrow…

— By Tim Hanson

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