Vicious Cycle in Investing

A British investment banker, who was vacationing in the Philippines, was at the pier of a small coastal village in Surigao when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna.

The British investment banker complimented the Filipino fisherman on the quality of his fish and asked, "How long does it take to catch them?" The fisherman replied: "Only a little while".

The foreign investment banker then asked why didn't he stay out longer and catch more tuna? The local fisherman said he had enough to support his family's immediate needs.

The British then asked, "But what do you do with the rest of your time?" The Filipino fisherman said, "I sleep late, fish a little, play with my children, take a good time with my wife, stroll into the city each evening where I sip brewed coffee and sing-along with my friends at the karaoke bar. I have a full and busy life."

The British scoffed, "I am a CFA charterholder and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, then eventually opening your own cannery. You would control the production, processing, and distribution. You would need to leave this small coastal fishing village and move to Makati City, then Tokyo, Los Angeles, and eventually London where you will run your expanding enterprise."

The Filipino fisherman asked, "But, how long will this all take?" To which the investment banker replied, "about 15 to 20 years."

"But what then?" The British laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions of pesos."

"Millions . . . then what?" The British investment banker said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a good time with your wife, stroll into the city in the evenings where you could sip brewed coffee and sing-along with your friends at the karaoke bar."

:)