When the Twain Shall Meet?

“Oh, East is East and West is West, and never the twain shall meet”–Rudyard Kipling.


So the culture of the West (Europe and the Americas) will always be very different from that of the East (Asia). 

This has been true to a large extent over centuries.

The western countries were ruling the east and for them matching the culture was not important at all as they could rule through power.

Think about the working conditions of the 18th century.

Many people left their villages to work in mines and textile factories for 12- to 14-hour days, 6 to 7 days per week — with minor food breaks between.

They worked outdoors in extreme weather conditions with machinery that required incessant maintenance and in factories that were unkempt, dangerous, and held poor lighting.

It wasn’t uncommon for a worker to lose a limb from the machines or acquire a serious lung infection from the hot polluted factory air.

The mindset was I pay you, so I own you.

Today the situation is exactly the opposite as the employers in the US are not being able to get workers unless they advertise work from home options, flexibility, fair wages etc., etc.,.

What changed-what made the Twains meet?

The industries today are much different than those in the 18th century.

Manufacturing jobs are only 20% of total jobs from over 60% in the 1970’s.

Knowledge workers need time to unwind their thoughts so they can come up with fresh ideas.

If treated like bonded Labor, you can’t get creativity and productivity from them.

Google provide you 20% of time to do side projects, creating a culture that says, “You do at Google what you want to do and not what Google asks you to do”.

This has led to terrific innovations in how we experience the internet today.

The recognition that you can’t attract the best-in-class talent and if you do attract, you can’t retain it with oppressive working conditions changed the mindset.

Change prompted by either culture, markets or commerce can make the “twains” meet.

Remember KFC of the “Fried Chicken” fame has a vegetarian menu in India.

Can the “Fear” and “Greed” Twains evert meet?

When investor tell me that they are in it for the long term and then worry about short-term corrections, they are just oscillating between “Fear” and “Greed”.

Here is a sample of some headline from March 20 and then the later part of 2020 and now.

These headlines incite “epinephrine” and “dopamine” to play havoc on your system.

Having said that, this is my observation of what goes on:

  • Investors invest on advice and not understanding.
  • They trust the advisor and often ignore the role of due diligence.
  • They don’t have the competence (which is fair, not everyone will have competence), however often they don’t even make the effort to be able to ask the right questions.
  • “Fear/Greed” makes them “fit” news into their pre-conceived “narrative” fueling “bad decisions” that cause regret
  • In “good times” and in “bad”, ability to stick to your investing discipline and asset allocation is tested and it becomes challenging for investors to do so successfully.

So, what do you do, how do you make the “Twain” meet?

Well, read the above para again and the last point a couple of times.

  • Develop an approach.
  • Stick to it with discipline
  • Develop a playbook of questions that you will ask for every investment decision
  • Have a thesis for every decision
  • Take pre-conceived notions out of the equation

The point is “fear” and “greed” come largely due to lack of understanding of where the decisions are coming from.

As long as you try to bridge this gap-you might succeed in making the twains meet.

Finally practice what John McEnroe (the legendary tennis player) said-

“I neither get so happy about my wins nor too sad about my defeats”.

If you stick to your discipline and are a “long-term investor” results will come if you can stick to your process.

Finally, as always “Stay the course”

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