Why do people climb mountains?
90 years ago British climber George Mallory famously answered: “Because it’s there.” It could be for the challenge to body, mind, and spirit that mountains represent. It could be for the exercise and fresh air. Or it could be for the status.
A couple of journalists have been cataloging Himalayan expeditions, and their data provide evidence that people do climb for the bragging rights. Over the years, there have been over 1000 expeditions to Everest, the world’s highest peak. The next seven highest mountains in the Himalayas—part of the prestigious “8000-meter group”—have seen an average of 260 expeditions. And the next eight-highest peaks—just below 8000 meters—have seen, on average, only 20 expeditions. The arbitrary 8000-meter threshold is a magnet for summit attempts.
It may not be for bragging to others—people may just want to be able to tell themselves that they’ve reached the Earth’s highest point, or have climbed an “eight-thousander.” We’re status-seekers, and sometimes the status is internal. This has important investment implications. In the long run, finance is rational. Money doesn’t care who owns it. But in the short-run, behavior is non-rational. People buy and sell assets for all kinds of reasons, which include status.
Investors need to act rationally. Bragging won’t help us reach our financial goals. “Because it’s there” may be an adequate excuse to bag a peak, but it’s not a good basis to buy a bond or stock.
Douglas R. Tengdin, CFA
Chief Investment Officer