Tuesday, 19 August 2014

Develop Your Spidey-Sense

spider web
Source
My son has captured a huge spider in our bathroom and has adopted it as a pet (naming it Shelob). Although this behaviour is more than a little questionable, it did get me thinking...

Spiders have provided us with inspiration for thousands of years: there is something about their painstaking work building (and rebuilding) a web and their seeming unlimited patience waiting for a victim to get caught up in it. (Robert the Bruce is the most famous example). They lurk, unseen most of the time - that is until they are caught in the open, unexpectedly.

So, can spiders teach us anything about investing?

The truth is that I can see much that is spider-like in my investing approach.

First, the web. Do I need to spell it out? Apart from the obvious parallel of the World Wide Web, my own web is the DIY Income Investor portfolio. This provides the basis for the information that I monitor on a daily basis. The portfolio prices twitch and shiver all day long, much like (I imagine) the strands of a web blowing in the wind - and sometimes the wind can blow quite hard. Most of these vibrations can be ignored, but occasionally there will be a twang on the web that requires further investigation. A 'disturbance in the force', if you like.

One fact I remember from a TV programme (and I've checked it) is that spiders can produce 7 different types of web silk - amazing for such a small creature. Well, I suppose my portfolio web consists of a similar number of different basic types of investment (dividend shares, corporate bonds, Pibs, prefs, equity ETFs, bond ETFs), each calculated to attract a particular type of prey (for 'prey' read 'buyer').

Yes I do leave my portfolio web occasionally to hunt down new targets - but so do some spiders.

Second, the lurking. Spiders are clearly very patient (for the most part) and they do not react to the first tug on the web. Patience is such a key virtue in investment that I have had to impose rules on myself to curb the urge to just do something.

Finally, when the time is ripe - I like to strike decisively! No half measures usually. Shelob seems to be a hunter as he/she has not built a web in captivity but does eat the various food items provided - eating them completely, rather than - as expected - just sucking out the insides. And, I'm afraid that is another similarity: while I am happy to suck out the dividends and the bond coupons, what I really am after is a killing on the purchase price - capital gain, in other words.

Then back to my dark corner...

[And yes, there isn't much to report on the real non-spider portfolio, other than it is doing quite nicely, thank you. So nothing to do but wait.]


I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

2 comments:

  1. Your posts are increasingly becoming rather abstract. This is neither a good thing or a bad thing - just an observation!

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    Replies
    1. :-) Sorry Timbo - but I have some cash that needs investing, so normal service will be resumed shortly!

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