The Short Run and The Long Run

I have always wondered where the border between the short run and the long run would fall. I have not reached a conclusion because it seems to be contextual. It depends on many factors.

Many years ago I had two clients who were vastly wealthy and had been for a dozen or more generations. Their idea of the long run was 100 years. I have seen speculators in real estate whose long run was a year, and I have seen speculators in the stock market whose long run was lunch tomorrow.

You need to understand yourself, your context, and the nature of the tool you are using to achieve what you want.

An opening position

Suppose we made it very simple and related to what drives the action.

  1. Short run is impulsive and addictive.
  2. The long run is purposeful.

Another version

  1. The short run is hyper-active and driven by events – identifiable decisions chained together
  2. The long run is a system or process that is directional oriented rather than goal seeking.

Finding a fit

Each of us has a style that leads us to where we want to be. Some require action and drama. Others, like Warren Buffett, prefer boring. Make a good decision and keep it running forever.

Neither isĀ  necessarily right. A kinetic, drama oriented manager can be successful and would be unhappy outside the action. A long term investor with a dozen positions might adjust a piece twice a decade and would be driven mad by the drama of day-trading.

Some people are loss tolerant Others are not deterred by loses so long as they lose small and win big. An example of the latter is Black Swan author Nicholas Nassim Taleb. In the book, he said his fund lost on more than 80% of the positions they acquired, but the losses were small. The other 20% or less paid the rent and far more.

The stock market is an expensive place to discover yourself.

The bit to take away

The very best achievers know there strengths, their visions, and their temperament. The know how their tools work and how they interact with their external context. If you don’t know those, the short run will be very exciting.

The long run is not just a connected series of short runs. Managing for the long run is a different mindset. It requires a different temperament and tool set.

By playing the event game, you can be right ten times and wrong once and have nothing. It’s less likely with the systemic approach.


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I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email to don@moneyfyi.com

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