From World Headquarters
Fly the Plane! Manage the Money!
Atul Gawande, MD is a medical doctor and a published author, writing about medicine and the complexities of modern life. We have been fans of his writing for a long time and own a number of his books. One in particular is titled “The Checklist Manifesto.” It is a book about how so much of modern life—from construction to medicine to flying—has become so complex that a checklist of steps or actions has become a necessary tool for safety and quality in many walks of life. Indeed, Gawande relates an anecdote about how the B-17—a World War II era bomber—developed the first checklist after an unfortunate maiden flight. Flying a large multi-engine long range bomber with a crew of 10 required much more attention to systems (control surfaces, fuel, oil pressure, engines, weapons, ordnance, crew) than the old stick and rudder single seat fighters. Gawande relates how a checklist developed for a small private plane listed the various things to check in an emergency but first on the checklist was the following reminder: FLY THE PLANE! It seems that humans are easily distracted from item number one as they work down the checklist under the stress of an emergency. In flying, there is significant downside to forgetting to fly the plane. As an independent Registered Investment Advisor (RIA) we wear a lot of hats: Chief Investment Officer, analyst, portfolio manager, investment advisor, trader, client service rep, compliance officer, marketing & sales officer, data wrangler, website admin, etc. It is all too easy for us to get caught up in activities that are quite necessary to maintain a business but not related to investment activities. So with a nod to Dr. Gawande we constantly remind ourselves to: MANAGE THE MONEY! While we monitor the markets in real time on a daily basis, we are not actively trading. We trade only to invest a portfolio and then to re-balance as market volatility and action presents the opportunity to sell or trim, and buy or add to existing positions. Our aim is to maintain fidelity to the model portfolio we chose for your portfolio based on our discussions with you and your articulated goals, objectives and risk tolerance. Also, we infrequently make changes to the model and that will trigger a few trades in your portfolio. Of course, forgetting to Manage the Money won’t have the same near-term consequences as forgetting to Fly the Plane. Still, as we seek to maximize your ultimate investment outcome, fidelity to the model and to the Timeless Truths of investing will go a long way to making sure you get the outcome you desire.