What Fat Ladies In Bikinis Taught Me About Investing

greenback

I love the beach, and not just because it’s the beach.  You see, my wife and I are people watchers.  We watch, we judge, and we feel guilty about it (well, she might).  On a recent trip to the beach, I sat in my hat, sunglasses, under a canopy, and enough sunscreen to refract 2 month’s worth of sun exposure, and watched.

I observed the obesity epidemic first hand, which I’m okay with since I enjoy the ice creams myself, but I also observed the blatant disregard for humility in the matter.  I’m not going to walk around in a Speedo anymore than women such as exhibit A to the right should be rocking bikinis.  Being a people watcher means that I should attach a story to each large person in a bikini to back up my judgment.  But being the conceited narcissist I am I of course had to take their love of fried food, Jack Daniels, and C-Sections a step further and tie it back into something I could learn.

This image, which is not mine, actually does an excellent job of explaining what I learned from women just like them at the beach.  Exhibit A1, which is front and center, is the average investor.  The average investor makes an investment in a specific stock, loses money, but refuses to sell.  They don’t sell because of an emotional attachment to the stock they thought would outperform the market.  They also know that by selling the stock they are acknowledging a loss because it’s technically not a loss until they actually sell.

Exhibit 1B is rocking the flowery one piece.  She made the same investment and lost the same money, but she admits it’s a loss, sells, and moves on with her life.  What separates the two investors?  Other than a piece of string that turns one spare tire into 2, it’s how they treat the same situation.

These women are roughly the same size.  They are both medically obese.  But one covers herself while the other does not.  Exhibit A1 wears a bikini, but why?  No person on earth will enjoy the view, and any attempt to increase attractiveness via a tanned torso will be offset by the size of said torso.  So why does she wear a bikini?  Because she doesn’t think she’s fat.

Oh sure, she knows she’s big, but she’s refusing to admit how big she is.  Just like the investor knows they’ve lost money, but they won’t sell because they don’t want to admit it to themselves.  In her world, she isn’t really fat until she gives up and starts wearing the one-piece.  She hasn’t lost money until she sells the stock.

By wearing the bikini, she’s sending a message to herself that she could still slim down, or that she’s not as big as she is.  Exhibit 1B on the other hand knows she’s big, and just wants to have fun at the beach.  She knows she’s big, but doesn’t want to distract herself or others by jumping into the back-cleavage olympics.  She’s just as likely, if not more likely to actually make a turn around.  She’s the one who sold her stock at a loss and moved on with her life.  It’s the rational decision, and the best one for her bottom line (and perhaps her waistline.

As I sat on the beach and pondered such thoughts sure to get me a special place in hell or at least a stern look from St Peter, I realized there are other examples of this, even in my own life.  In high school, I was chunky.  I slimmed down a lot, but after I met my future wife stopped trying so hard (plus she’s has a serious sweet fang.  Not tooth, fang).  But when a pair of pants got too tight, what did I do?  I kept buying the same size.  I admit I bought pants too small with the expectation of slimming down and fitting into them.  This makes me no better than Exhibit A1.  So please, before you get upset with me, please know that it was the large women in bikinis that gave me this idea, but they ain’t exactly the only guilt party.