Flitting, Feeding, and Digesting

Have you ever watched hummingbirds feed?

Photo: Tom Koerner/USFWS. Source: Flikr.CC-BY-2.0

We used to have a hummingbird feeder outside our front window. They’re fascinating to watch. They can be quite choosy. Because they use so much energy, they prefer only to feed on very sweet nectar – at least 25% sugar. By comparison, a can of soda like Pepsi or Sprite is about 15% sugar or its equivalent. They consume about half their weight in nectar each day. Because sweet nectar doesn’t have many nutrients, hummingbirds also supplement their diet with insects, like mosquitoes and flies. They sometimes hover inside a swarm, eating away. Good for them!

Investors can be like hummingbirds. We’re highly consumptive, zooming from one news source to the next. Before the internet, I worked on a trading floor where we received multiple copies of six daily newspapers – two from Europe, three from the US, and one from Asia. Sometimes we would trade goodies like doughnuts or muffins to get first dibs on one of the business sections. This is similar to hummingbirds, too. They’re quite territorial, defending their food source from rival hummingbirds.

Today, investment web sites are crammed with information, competing to be the sweetest nectar for hovering investors. And investors are always flitting about, looking for new developments in the economy, taxes, accounting, or other issues of the day.

But we should learn something from hummingbirds. They spend 10-15% of each day feeding, and 75-80% sitting and digesting what they’ve consumed.

Photo: Jon Sullivan. Source: Wikimedia. Public Domain.

There’s too much emphasis on the latest news, faster data feeds, and finding unique sources of information. I heard one investor note that he follows a Twitter account devoted to identifying the types of aircraft taking off and landing at London’s Heathrow Airport. That’s over a thousand flights a day. I suppose there’s an algo that can turn that data into an investment insight, to concentrate that dilute news into sweet nectar. It still seems pretty obscure, though.

Too much time feeding means not enough time digesting. The most important information we possess as investors is specific to each of us: our own goals, limitations, objectives, and constraints. How we reach our investment destination is just as important as when we get there. And the best food source for a hummingbird may not be the closest feeder, if a cat lives nearby.

Hummingbirds aren’t just beautiful little birds. They can serve as examples, from nature, of ways to adapt to changing conditions and challenging circumstances. Because when the investment winds shift, we may need to adjust and shift with them.

Photo: Dan Pancamo. Source: Wikimedia. CC-BY-2.0

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2018-12-17T09:14:41-04:00December 14th, 2018|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

Leave A Comment