Two short tales of the sea, some 400 years apart, that suggest that haste and a failure to accept expert advice can have consequences.
A few weeks ago, Kim Jong Un watched as a new 5000-ton destroyer toppled during a “risky” side launch. Naval experts attribute the failure to a combination of inexperience, a rushed timetable, a top-heavy war ship and Kim’s overruling his advisors.
This is not a new problem. A Swedish warship, the Vasa, built between 1626 and 1628, sank within a few minutes of launch. The ship was dangerously unstable, with too much weight on the upper structure, was rushed into service by the king, whose subordinates lacked the political courage to openly discuss the ship’s problems or to have the maiden voyage postponed. Incidentally, the Vasa was salvaged, with a largely intact hull, in 1961, and is now housed in a specially built museum in Stockholm, Sweden.
There is a message for investors in these two stories. Haste can be a problem. Even though markets tend to react, often overreact, to every bit of news, it is not necessary to manage your portfolio that way. It can also pay to listen to your advisor(s) before making decisions.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
