It doesn’t appear that there was ever a rock band called Destination, but Journey was great a couple of decades back. Steve Perry and the guys from San Jose, CA. However, this blog post isn’t about music. Instead, it is about asking a basic question of life: Is life about the Destination or is it instead about the Journey to reach the Destination? Are you a Journey person or a Destination person? Do you enjoy the process and the time it takes to achieve a goal, and do you learn from what happens along the way? Or do you just want to achieve your goal, and you don’t relish anything that gets in your way of achieving your goal? Your answers to these questions may help you determine how you invest your money and how you plan your financial life.
If you are a Destination person, you just want to get there. You won’t enjoy the plane ride to Hawaii – you just picture yourself on the beach in Maui sipping a Mai Tai, and you will put up with what it takes to get there because the Destination is overwhelmingly beautiful and worth it to you. A Destination person is goal-focused. You will do whatever it takes to achieve your goal. As an investor, a Destination person will set a goal of, let’s say, earning a 10% return, and they will do whatever they need to achieve their 10% return. Destination investors also tend to be better Value investors. Warren Buffett can be seen as a Destination investor: He sees the untapped value in an investment, buys it for what he considers to be a fair price, and doesn’t waver in his conviction over time as “Mr. Market” says the value isn’t what Buffett believes it is. The Journey can be a challenge to Destination investors because daily trading is constantly telling the Destination investor that they are wrong. That’s one reason why Buffett is considered to be one of the greatest investors ever: because he doesn’t let Mr. Market influence his conviction.
Ralph Waldo Emerson coined the phrase, “Life is a journey, not a destination.” A Destination is a point in time, whereas a Journey is a continuum of points in time. What does that mean for investing? The Journey is every day the stock market is open for trading. We can be up 300 points on the Dow one day, and, as we have just experienced, down 1,000 points the next. As an investor, even if you are a goals-focused Destination investor, you need to learn to tolerate, and even love, the daily journey. The key work in the phrase “Journey Investor” is the second word – Investor. It implies that you are in it for the long term. A Journey investor may not be as end-result oriented but will learn from their mistakes along the way. A Journey investor will still most likely have a goal that they are trying to achieve, but they may be more amenable to shifting that goal as the market plays itself out and as their own values and tastes change as they grow older.
So which is better as an investor, Destination or Journey? I’m not going to fudge here. Purely as an investor or investment manager, it is better to be a Destination person. Eyes on the prize at all times is the best way to make money in the market. Don’t worry what the market tells you from day to day because at the end of the day you know your analysis of your investment will be proven correct. However, for life balance? It is definitely better to be a Journey person. Many of the very best investors are admittedly not the most balanced people. They are often workaholics with an Ahab-like obsession to make money. Not that I would compare Warren Buffett to Captain Ahab because Buffett comes across as a pretty balanced guy, with his charity work and his bridge playing. But there is only one Warren Buffett.