How a Near Death Experience Taught me a Valuable Investing Lesson

What started as a typical boys camping trip almost ended in two of us heading home in caskets.

We’d travelled a couple of hours up the coast from Newcastle to Sandbar. A place we had been to many times before. Camping, swimming in the lake or beach, golfing, volleyball, soccer, games of 500 that last the entire weekend, fire, and alcohol.?

All the ingredients of a fun filled weekend with the aftertaste of a back to work hangover on Monday (as a side note I don’t drink now).?

A year before we had finished school, now with our whole life before us.?

Arriving on Friday we hastily set up camp, went through the bush collecting firewood and promptly started the festivities.?

The following morning, a mate and myself decide to walk to the beach and have a swim. We had been able to hear the waves breaking from the campsite, so we knew the surf was pumping and worth the 20 minute walk.

It’s a remote beach with only four wheel drive access over the dunes or by foot. It’s not patrolled by lifesavers like most beaches in Australia.?

As we head over the crest of the dune we see it’s just us and a fisherman at the beach. For a beach that’s over a mile long, that’s plenty of room to ourselves.?

After surveying the beach and picking the best spot to head in, we jump in the water.?

Sure enough the swell was pumping. With sets rolling in at 2 metres. After walking and swimming out we made it to a sandbank where the water was just shallow enough to touch the bottom.?

After about 10 minutes of catching waves I saw a set of waves coming. They had been coming in sets of 2 to 3 usually. Giving enough time to swim back out after riding one of them in, to catch the next set.?

These sets of waves were a lot bigger and they broke out further than I thought, leaving my mate and myself to fight the whitewater.?

Then the next wave broke, as it gets to us we take a breath and dive under, popping back up after it’s past. Then the next wave came, and the next, and the next.

It’s getting harder to pop up after the waves go past because I can’t touch the sandbank. Due to that and the waves still breaking it was becoming harder and harder to get a breath before diving back under.

Another wave, and another. I realise I haven’t seen my mate for a few waves and now after each wave I start looking around for him.?

My mind begins to wander...

But I knew what to do.?

Because I’d trained and practiced for this scenario, in tough conditions just like these.

You see, 4 years previous I started training to be a volunteer Surf Lifesaver.?

We learned theory as a group, and then went out and applied that knowledge. Our trainer kept drilling us until we weren’t just competent and knew how to do the skills, like first aid and CPR, or performing a rescue from a board.?

She kept going until she saw we were confident.?

Confident in perfect conditions, and confident in poor, storm swell conditions. Everyone reached that in their own time, but we all made it by the end of the program.?

Our trainer knew the difference between a person who is competent or confident in a life or death situation.?

That confidence comes from doing the action in harder and harder conditions, and proving to yourself that you can do it.?

Confidence through competence.

The other thing she gave us was a plan. A plan for how to respond in many situations.?

When shit hits the fan, you need the war plans ready. You don’t have time to think through first principles what the best thing to do is.

So there I am, trying to look around for my mate. Then, after another couple of waves I spotted his head bobbing out of the water about 30 metres away.?

At this stage I’m exhausted from just trying to keep my head above water between waves. But I start to swim towards him between each wave.

As I’m swimming towards him, I realise we are nowhere near where we walked into the water. Meaning during all those waves, we’ve been swept down the beach about 100 metres.?

Now that presents another problem, we were most likely on our way to the mouth of a rip which would then pull us out to sea.?

After fighting against the waves we were then going to have to do it all again!

I had a plan though. I made it back to my mate just as the waves died back down. He was ok, just exhausted but had enough to make it.?

We needed to swim across the gutter that ran along the beach before we got to the rip, so we started swimming and riding the whitewash of the waves in.?

We finally made it to the beach. The sand had never felt so good. I literally crawled up the beach and rolled onto my back exhausted. I’d done a lot of sport and I thought I’d pushed myself to the limit. But this was the next level.

I sat up and looked over at my mate, and one of us made a joke about heading back in for some more waves. Safe to say we’d had enough…

Here’s 6 lessons I learnt:

1) Need Theory and Practice

• Need to learn book smarts and street smarts, I’ll go further with both.

2) Progressive Overload

• Just like in the gym, learn the correct form (theory), and as I develop, make it progressively more difficult so I’m always pushing myself to improve.
• Confidence comes from doing the work and proving to myself that I can do it. Confidence without evidence is delusion.?

3) The Power of Community for Learning

• We learnt in groups and were able to share our learning with each other. We gave each other pointers, had people going through the same challenges as us, and a group to share in our successes.?
• We were able to learn and improve quicker, and have fun along the way.?
• Most questions didn’t have one right answer. Different perspectives helped to understand the different aspects you may have neglected to think through.

4) A Thoughtful Guide

• Our Surf Lifesaving trainer was amazing. She didn’t give answers, she asked questions, made us think, guided us through the framework to come to the best decision.?
• Created an environment where we could fail, repeatedly, and that was ok. With each failure she helped us see the lesson in it. A mindset that helps in everyday life.

5) War Plans Ready

• In difficult situations that are foreseeable, you need to have a plan. Ideally, you need to have a plan you’ve practiced.?
• In the moment, emotions can take over, you can become overwhelmed, especially if you need to think through something you’ve never done before.
• 5 P’s: Proper Planning Prevents Poor Performance

6) Stock Market Analogy

• With hindsight, I can see the similarities between my experience on the beach, and the stock market.?
• Oftentimes in the stock market you cannot see far ahead or know what might happen. Like when the pandemic started and the stock market crashed. How much further was it going to go??
• Position yourself to hold on and survive, be patient, analyse the situation, pick a plan off the shelf, and execute the plan.
• That plan might be having a watchlist of stocks you want to buy at the right price. It might be looking at the specific situation and finding new opportunities this situation may present.

As you can see, before we nearly drowned at the beach, there was plenty of preparation that had been done to save us. It’s exactly the same for the stock market. Invest Like Buffett uses all of these lessons and more.

Repost ?? if you have a mate that needs to learn some of these (preferably without nearly drowning ??)

Cheers,

Jack

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