What Jack Bogle Taught Me About Surfing

crispydoc Uncategorized Leave a Comment

A funny thing happens when you commence your education in pursuit of financial independence. Without realizing it, you begin to view other areas of life through the lens of finance. The insights into non-financial life might pleasantly surprise you.

After a family member’s prolonged illness, this morning was my first opportunity to paddle out for a winter swell. The surf report was good enough to drag me out of a warm bed and into our cold (for California) house.

An hour later I had my gear loaded and a surf kayak strapped to the roof of my Kia. Today would be the second consecutive day I left the house without shaving or brushing my hair. A reduced shift load nicely complements a dirtbag lifestyle.

Elegant terns shrieked overhead while harbor seals sunned themselves on rocks during the twenty minute paddle to a beloved cove that’s been surfed since the 1950s. Conditions were beautiful – glassed out, no wind, sun just breaking through the fog while chest high sets rolled in with only a dozen guys in the water.

A 69 year old acquaintance on a vintage longboard greeted me warmly – a celebrated local surfer who claimed both a top ten world ranking on the 1980s professional surf circuit and a stint as a centerfold in Playgirl Magazine in the same decade. I’m not sure which accomplishment remains his greater point of pride.

We’d met a couple of years earlier at this spot when he told me, in memorably colorful language, to stay away from him. Two days later, after a newbie surfer lacerated this guy’s dominant arm with his board, I identified myself as the same surf kayaker he’d seen on the water (he turned three shades of pale) before politely and professionally suturing him up in the ED.

As surf karma would have it, he now made it a point whenever we saw one another to introduce me to his friends in the water, assure me that his crew would keep anyone from messing with me, and (like seniors everywhere who meet doctors in social settings) regale me with tales of his latest hernia repair.

Let’s return to this morning in the water, because this is where Jack Bogle comes into play. At the start of my financial renaissance I came across his essay The Telltale Chart, a keynote speech he gave laying out the case that stocks eventually display reversion to the mean – the tendency to return from highs and lows to an average price somewhere in between. Jack was specifically countering the Fama and French data suggesting small and value stocks slightly outperform large and growth stocks in the long run. If Jack’s observations were correct, it occurred to me, they might have implications for where to situate myself in the lineup.

At this particular spot, there are three main breaks, and for reasons that defy explanation, surfers tend to cluster at the two at either extreme of the cove chasing after the same waves. On a popular day, this place becomes a zoo, attracting 50 or more surfers at once. The lineup gets crowded, with multiple people commonly dropping in on the same wave. Other surfers in the lineup have a habit of immediately paddling to where the wave just broke.

I make it a point to maintain my distance and avoid the most densely populated breaks completely, usually waiting for opportunities just outside the lineup. This distance tends to be mutually respected, since a blow from a wayward surf kayak can easily break a rib or drop a lung.

Inspired by Bogle (the wave will eventually mean revert and start to break where it has not been breaking) and Gretsky (paddle to where the wave is going to be, not to where it has been) I staked out the abandoned middle break and waited. Sure enough, a chest high set rolled right up to me in under ten minutes, and there was no competition. This abundance lasted the nearly two hours I was in the water.

How has your newfound financial knowledge made your worlds to collide?

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