What lessons should investors take from nature?
Photo: Victor Hanacek. Source: Picjumbo
Nature is infinitely resilient and adaptive, adjusting to changes in circumstances to improve its outcomes. We find living things growing and thriving even in the harshest environments: the hot springs in Yellowstone, Antarctic “lakes” under miles of ice. We should expect that the natural world can teach us some important lessons.
As an example, people have long been fascinated by the behavior of honeybees. In 1705 Bernard Mandeville published “The Fable of the Bees” where he explored concepts like the division of labor, the invisible hand, and the paradox of thrift. His work was controversial when it was published. Folks were offended when they were compared to insects. But it was ahead of its time, anticipating much of the field of economics.
Investors can learn a lot from honeybees. Just look at how they create new hives. They form a swarm; individuals spread out to gather information from their surroundings; then they come back and share their data with the group. Eventually, the swarm collectively decides to move, and builds a new colony.
The best investors are like bees, learning as much as possible about their investment universe and sharing this with their teammates. They’re efficient with time and resources, but they also learn by trial and error. Also, they’re connected to their world – meeting with companies, clients, and other analysts to make sure their goals and objectives are realistic and sustainable.
If we can learn from nature, our investments can be like nature as well: robust, sustainable, and thriving. And the results should be sweet.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”