Today’s blog entry is a guest post by Arty, one of the best contributors to the Retire Early and Indexing discussion-board communities in recent years. I’ve read hundreds of articles about our economic crisis. Few have made the key point about the cause of the crash as clearly and succinctly as the words below.
Arty put forward the words as a comment to the blog entry entitled “This Month’s Permanent Portfolio,” where he also offered dozens of other comments also worth checking out.
Was listening to your podcast on “attitude”. And how investors can remain emotionally “invested” in doing the wrong thing. Reminded me of a story I kept (written I think, by Arthur Jones, who pioneered a far more rational approach to strength training than had existed in the mainstream–and, sadly, still exists as the dominant model, though people are slowly learning:
Imagine you are on a hiking trip through some rugged desert terrain. You see a figure in the distance. It’s an old man, bearded and half-naked, on hands and knees, with his fingers clawing at the hard, sandy earth.
“You ask, ‘What are you doing?’
” ‘I’m digging for gold.’
” ‘How long have you been at it?’
” ‘Weeks — months maybe. It’s painfully slow work.’
“You notice the old man’s bloody fingers, his raw and callused knuckles. You say, ‘But listen, man! Digging with your bare hands is a pretty inefficient way to prospect for gold. That hole’s only a couple of feet deep. Let me loan you my shovel.’
“You reach into your backpack, pull out a lightweight, tempered-edge spade, and drive it into the ground. Then, you show the man how he can break and scoop the hard sand much more efficiently. In less than five minutes you have demonstrated to the old fellow that he can make more progress in a few moments than he could in a month of using his bare hands.
“Then, an amazing thing happens,”. “That old man’s eyes fill with hate and his face flushes angrily. He charges at you and grabs the shovel from your hands. He’s now preparing to throw the shovel, or perhaps even try to beat you with it.
“You quickly retreat, and get the hell out of the old man’s range, as the shovel comes crashing down behind you on the hard sand.”
That’s not the end of the story.
“If you return to that rugged location in the desert a year later, what would you expect to see that old man doing? Would he be using the shovel properly and have holes as big as school buses spread over the immediate and adjacent surroundings?
“No, absolutely not! Instead, the prospector would be at that same spot — with a somewhat bigger hole — still digging with his even-more-callused fingers. And there, in plain sight, only a few yards away . . . would be the unused, and now rusty, shovel.”