The summer before I started college I responded to a classified offering $10 per hour for light construction. $10 per hour was over two times the minimum wage at that time. I promptly applied by phone and was told to show up the next morning. I thought I was in luck.
A local apartment complex wanted to expand, but due to the tight spaces, they couldn’t get an excavator into the spot. Our job (there ended up being one other naive youngster) was to dig a large hole to pour the foundation. In retrospect, I think the complex owner just thought it would be cheaper to pay us to dig it out than renting an excavator. He may have overestimated our speed. It took us about two weeks to dig out the hole. I was lucky to be one of the individuals dumb enough to respond to the ad–I guess that is what they mean by “dumb luck.”
That was my first and last experience with “light construction.” A few weeks later when college started, I knew I wanted to earn a living not digging ditches. Being in a position where digging ditches was my only option scared me. However, I still had limited intelligence and so promptly signed up to major in Philosophy. Unfortunately, the only job offered to Philosophy majors was graduate school (literally, that was the only option listed on the career opportunities handout). I signed up to go to law school, fearing once again that ditch digging might be my only option.
Fast forward to my current investing mindset, I still fear ditch digging. Investment professionals just put a fancy spin on it and call it “Capital Loss.” As long as I don’t lose my capital, I will never have to dig any ditches again. Returns somehow take care of themselves when you focus on avoiding capital loss. That’s not overly scientific, but that’s my approach to investing. Having briefly associated myself with ditch digging, my focus is firmly fixed on maintaining my capital. To sum it up, I have no interest in sacrificing what I need and have for what I neither have nor need.*
* I believe Buffett said something similar to this, however, I have been unable to find the quote. If he didn’t say it, it was probably Munger–either way, almost assuredly not my saying.