When you read this, I’ll be in the Sangre de Cristo Mountains of Northern New Mexico fly fishing. I taught myself to fly fish after growing up watching my father on streams in the White Mountains of Arizona.
I like to keep my fishing simple – small streams, basic equipment. When in Colorado, Dave and I see fishermen from the Aspen area so burdened by hundreds if not thousands of dollars of equipment – boots, waders, vests, creels, nets, rods, hats, glasses, fly tying equipment – that they can hardly navigate the water! So, imagine my surprise when I flipped on a TV channel that was featuring Yvon Chouinard, the founder of Patagonia, fly fishing with just a rod and a line – no reel, no overstuffed fly vest – just a rod and a line! Obviously he both has access to and can afford any fly fishing equipment he wants but, instead, he chooses to keep it simple.
Turns out this is the Tenkara method which originated in Japan at least 200 years ago. Only a Tenkara rod, line and fly are necessary for Tenkara fishing. The equipment is designed to direct focus to the actual fishing and catching of the fish, not to cause a major preoccupation with the equipment.
I know most of you don’t much care about fishing so I’ll cut to the chase. In our world, we have the option to make pretty much anything complicated or simple. I’m using fly fishing as an analogy to investing. We can try to beat the market by picking stocks or choosing to invest in mutual funds that are actively managed by professional stock pickers. But, studies have shown time and again that low-cost index mutual funds beat the experts most of the time. If the Nobel Prize winning Efficient Market Theory tells us that stock prices always incorporate and reflect all relevant information (in other words, you can’t out-guess the market) then common sense should tell us that we shouldn’t pay an active manager for trying.
As the Tenkara website says, “We love simplicity because it is liberating.” Who knew what fishing and investing had in common?