The Tipping Point
There is a moment, a point, a precise infinitesimal dot in the time stream that divides hope from despair, joy from sadness, success from failure. Lucky is the soul that sees it coming in advance, because timing is everything. I say lucky, because nobody can divine precisely when that moment will arrive; the best we can hope is to stay on the good side of the curve.
I have a personal anecdote to share, but first I’d like to recall this post from our discussion boards. It’s the all-time highest recommended post ever, at 2,460 recs. It’s a tale of risk, compounded and recompounded, and the almost inevitable consequence of assuming that risk: http://boards.fool.com/Message.asp?mid=12251371
Now for the anecdote. For years, I’ve moved a curio cabinet around when it was in the way of my work. Rather than be safe, I assumed the risk of leaving it filled. I’m not stupid, or unnaturally clumsy. Usually. Never broke anything, although there were some close calls that should have warned me.
When the tipping point came, it was a literal one. Like the portfolio described in the post above, the crash was sudden, decisive, and utterly complete. After twenty-five years of acquiring Swarovski crystal, my wife’s collection was smashed to pieces. My margin had been called. I hadn’t prepared for the worst; just hoped I could avoid it.
As I stood there in dumb, shocked silence listening to the pile of shattered glass still crackling on the floor, a soft voice said: “Honey, it’s just stuff.” That’s when I knew my real investment was safe, and paying huge dividends.I’ll not bet the farm again.