THE COMRADES MARATHON AS A METAPHOR FOR INVESTING
In June this year I should be once again lining up at the start of the Comrades Marathon for yet another edition of the world’s biggest and oldest ultra marathon. When recounting tales of previous experiences with the Magwitch team they often note how it sounds almost identical to the experiences that an investor may go through. In this month’s Financial View, we look at just how similar the two are because as they point out, whether you are investing or whether you are at the start of Comrades you share similar emotions. You know the journey is long; you know that there will be times where it feels difficult; sometimes you may wonder why you are doing it; but fortunately, you know there will be times where you haven’t even noticed the kilometres passing as the road rushes beneath your feet; and ultimately you know that you should reach your end goal. In fact, the vast majority of people do….
What is the Comrades Marathon
The Comrades Marathon is the world’s biggest and oldest ultra marathon. The race takes place over the 90km stretch of roads between Pietermaritzburg and Durban, with the direction alternating each year. As Pietermaritzburg is higher than Durban a race starting in Pietermaritzburg is considered a down run as you will have more elevation drop than gain. Conversely, one starting in Durban is known as an up run. Either direction includes more than enough hills to be a real challenge for a runner.
Comrades (as it is known in South Africa) was first run in 1921, and with the exception of breaks for World War 2 and for Covid, it has been run ever since. It became a real institution within South Africa during the apartheid sanctions as it was one of the few sporting events shown regularly on TV (back on TopSport for older readers). To date hundreds of thousands of South Africans have finished Comrades, and it remains potentially one of the better-known annual sporting events held locally.
In fact Comrades is so well known amongst South Africans that if you mention that you are a runner to someone else. They immediately ask you how many Comrades you have finished. This perhaps shows how strong South Africans are as around the rest of the world people would perhaps build their entire lives towards running a marathon. Here in South Africa we think nothing of running three or four marathons in the build up to Comrades for training.
Why the race is so similar to investing
The last two are critical to consider. We often see investors stop investing when the market comes off, and many capitulate and withdraw their investments hoping to sit on the side lines until better days. In Comrades if one was to get off on the road and move to the side lines you would wake to find that the road that was previously full of runners is now full of cars moving at telling speeds.
Why the The route profile as a graphic for how we generate wealth
If we invert the route profile of the Comrades down run (the direction of the race this year) we find that it eerily matches the typical wealth journey.
On the Comrades route the first quarter of the route leads you from the start up to the highest point of the course at Umlaas Road. This is a slow and you constantly question why they call this the down route. We can equate this to the early years of your journey with investments. You have good intentions to get things in place but having fun just seems so more important. Whilst in theory you have no obligations you find it difficult to save as your salary is the lowest it will ever be. The need to be socially accepted means funds are spent quickly in pursuit of things that we don’t really need like the fancy car that will do the same job as something a lot cheaper.
Once you hit the high point at Umlaas Road you in theory have many downhills in front of you at Comrades. The problem is that it the middle portion of the route you have two very mean hills that come at you in quick succession (remember the graphic is inverted so down is tough). The middle section of the run is where it can all go wrong. This is where you will see runners getting their legs rubbed even though just close to halfway through the course. This is where you will see people sitting in chairs crying etc. The same happens as we build wealth – this is the time where things can go horribly wrong. One probably now owns a house and has a young family. Both of these lead us to focus more on our financial picture but we find that we really have a lot of expenses. We want to save, we want to invest, we want to get rich but we just cannot put enough away.
Once you are through the tough part of Comrades you run past Kearsney College. This represents the start of the real down run. From here you have very few uphills and plenty of lengthy downhills. If you have done the basics correct up to this point you will make up time here and this will be where you enjoy it. It does however come with a sting – if you haven’t done the basics right you will be in serious pain on the downhill, cramp and worse. This is where runners throw in the towel even though they have covered the majority of the distance. In wealth management we think that once the children are out the house, you enter your golden years. Hopefully your children have been well educated and find a great job, allowing you to take everything you spent on them and allocate to your investments. Your wealth just accelerates, and this is the part of your life where you grow rich.
The last few kilometres of the down run into Durban are relatively flat. If you have run well, you may even enjoy the sensation of knowing that the finish is guaranteed even though you cannot even see the stadium yet and hear the announcer. Depending on the time on your watch you may even decide to rather just walk without a care in the world. This is exactly the same as investing. If you have done everything right along the journey you should be to coast towards your investment goals (normally retirement) as the heavy lifting and hard work is behind you.
The one thing that I can end on is that the sense of achievement after finishing Comrades is normally immense. One should have the same sense of achievement for successfully reaching your investment goals.
Recent Comments