Similarities Between Investing and Driving in Traffic

Saturday I got a late start driving to the mountains for some ruin hunting. I almost chose not to go, but decided that a little traffic with hiking was better than no traffic with no hiking, so I took off on I70.

And traffic there was! I prefer to get started early to avoid the traffic, but it can’t always be avoided. And that’s when I had an epiphany….

Driving in traffic has a lot in common with investing:

  1. You can take tremendous risks, get extremely fancy, stress yourself out and cause problems for other people, to find yourself only 20 feet closer to your destination. (Was it really worth it, asshole? Was it? 🙂 )
  2. You can sometimes take big risks and get way ahead, but this sometimes gets you killed or otherwise involved in an accident that leaves you far behind.
  3. Sometimes the slow lane is the fast lane.
  4. Sometimes people take huge risks and get away with it. That doesn’t mean you should follow their lead.
  5. The faster you go, the harder it is to stop, so when traffic starts flowing, watch out, because it could slow down ahead.
  6. On rare occasions, being aggressive is necessary from a safety perspective, but being aggressive for its own sake is more a sign of your impatience than any necessity.
  7. The best way to travel quickly is to know your destinations and plan accordingly. Going fast doesn’t help you much if you aren’t paying attention to efficiency. Getting lucky at stop lights doesn’t do very much if you fill your route with a tremendous number of turns.
  8. Don’t gawk at other people’s accidents. Keep your eyes on the road in front of you.
  9. Be careful flying past everyone else when they are all stuck in the same lane. It’s possible there is something up ahead and you are the idiot who isn’t paying attention. Alternatively, sometimes there isn’t anything up ahead, so it’s best to simply be cautious and not too head-strong.
  10. If your car is having problems, it’s okay to stay in the slow lane and go slow.
  11. Sometimes fancy cars break down. Entropy is no respecter of persons.
  12. The combination of experience and history are the best indicators of how busy or difficult a section of road can be in traffic. Neither forms a perfect picture, but both are very reliable indicators. Be careful of unfamiliar roads, though!

I could probably come up with a few more, but I think you get the idea. It’s a funny analogy, because humans are always trying to “get ahead”, and that’s exactly what people in traffic are trying to do, too.

What’s most compelling to me is that piece about efficiency. You can go as fast as you can, but if you’re constantly driving all over the place, the overall process is going to be very slow, whereas you can save far more time thinking strategically about your destinations. A lot of people want to get rich, just to be rich, but they have no idea what their real intentions are for that money beyond some vague concept of buying lots of things and experiencing the “rush” that comes with that.

Anyway, it’s an imperfect analogy, but it’s kind of fun, too. People put so much effort into getting ahead, but that’s kind of a shallow approach if you aren’t looking at the bigger picture.