Classical Investing: The Self-Aware Investor

How well do you understand yourself?

That’s one of the underlying questions Homer raises in The Illiad. Most of us know about Achilles, the brawny Greek hero. His role in the war is so important to the Greeks that when he argues with his commander and withdraws from the fight their army is almost annihilated.

But by far the most sympathetic hero in the story is the Trojan leader, Hector. He is no less powerful a presence in battle, but he is also depicted with his wife and young son within the walls of Troy. There is a touching scene in the sixth chapter where he prays that one day people will say his son is a “far better man than his father.” Hector ably leads his troops in spite of doubts that Troy can win this war. He knows his role: father, husband, warrior.

By contrast the only thing Achilles understand is his own personal desires—first, for honor from his men, later, for revenge when a close friend is killed in battle. Homer contrasts these two, perhaps to demonstrate that rash actions lead to bad ends. We know Achilles will die in the war as well.

Just so, investors need to understand themselves when they enter the arena of the investing world. What motivates them, what they fear, what are their hopes for the future—these internal dynamics will come out when people put their money to work. Safety, growth, liquidity, regulations, taxes—all must be balanced. Self-aware investors understand how these trade-offs will impact what kind of return they receive and how well they sleep at night.

Both Hector and Achilles figure prominently in Homer’s poem. Their characters shine bright over 2700 years. But Hector’s honesty, integrity, and self-awareness are what we should admire.

Douglas R. Tengdin, CFA

Chief Investment Officer

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