in houseplants, Investing, Morgan Housel, The Psychology of Money

plants (again?)

How you ever felt like you were going in the right direction with something — anything?

It feels like that when I think a thought or write something that someone I admire vindicates by repeating the same concept. It feels like a win, perhaps for me more of a surprise that I’m actually going any direction at all.

Earlier this year, I read The Psychology of Money. Morgan Housel remains my favourite writer on personal finance and this book shows exactly why.

In a recent blog post, he wrote about how investing can take from examples more broadly and illustrated one from the plant kingdom. (As you know, I’ve been very fond of the plant kingdom having spoken about it here and more recently here.)

Mr. Housel analogized investing to plants! I should be proud, no?

I love Morgan’s subject about trees and investing. It’s beautiful and it’s largely accurate.

I’d like to offer a bit more to the analogy, if I may.

I would be the first to agree that fuelling fast growth means that you get brittle plants (and businesses for that matter).

But not all plants suffer from these exact problems. If you uproot anything and don’t have a good understanding of which plants may survive and which plants won’t, then you’re in for a lot of hard work and a lot of heartache.

Conditions vary and are so specific to the species you’re interested in (again applicable to both plants and businesses). The amount of sun and the type of sunlight is a major component (as Morgan illustrates) but I suspect that the additional lessons learned from this anecdote is more about the need for proper selection and that it is crucial for a good outcome.

Coincidentally, Mr. Morgan’s story about trees speaks a little to my realization that if you want a mature tree, you should find one that has already matured. Going from Zero to One requires a certain type of horticulturalist.

Either way, as an investor (or plant parent) of any maturity, selection is of utmost importance.