Articles

Making the Impossible Possible

Imagine you’re staying at a 5-star resort, and you want to put the chef’s promise that anything is possible to the test. What would you ask for? A rare, freshly picked mango in the middle of winter or a Maine lobster if you happen to be on a tropical island with scorching heat outside? I’ll let you ponder, but in investing, too, there are some impossible asks. However, I have good news: there is at least one way to make some of them possible! Let’s explore.

This article was inspired by my summer chats with fellow investors and a travel show featuring Eugene Levy, the Reluctant Traveller. For those who aren’t aware, he’s a renowned Canadian comedian whose peculiar sense of humor perfectly sums up his globe-trotting show. Aren’t we all a bit of reluctant travelers these days anyway? Airports seem busier, airplane seats narrower, and peanut bags tinier than we remember, don’t they?

In one of his episodes, Eugene stays at a glamorous resort on a remote tropical island, where he puts the chef to the test. He merely asks for a burger, but other guests seem to request a lot more – perishable rarities from afar that are nearly impossible to deliver on time to that location.

This travel experience conjured up two images: one of a youngster asking a parent for something impossible and an aspiring investor with an equally ambitious request. For the former, it would be a plush toy in the middle of a long flight that was left behind at home. For the latter, it would be doubling or tripling the capital in an incredibly short time frame.

In my career as an investment advisor, I’ve taken many calls, participated in countless conversations, and answered numerous emails. Some led to potential business opportunities where what we offer matches what the client is looking for. Certain interactions made me smile. I remember at least one instance when someone asked if we could double their assets by the winter holidays because they were in the market for a bigger house. Wrong number, wrong advisor – I politely explained.

The conversations I mentioned, along with Eugene’s experience, made me ponder what happens if we flip the idea of an impossible ask on its head. What truly renders a request impossible? If late one evening, someone asks the chef for a rare, expensive French cheese on a tropical island thousands of miles away and expects it first thing in the morning, the time frame makes this demand nearly impossible.

The cheese is out there, available. It may not travel well, but there’s a way to fulfill the request safely. The obstacle is the time frame. The next 12 hours make this wish not much different than the cries I heard when a young passenger demanded immediate delivery of their favorite plush toy in the middle of a cross-Atlantic flight. Impossible.

Now, if we separate the request from the time frame, something interesting happens. You’d like the cheese, he’d like the toy, and the investor wants to double the assets. I have some good news! All three are possible. The cheese may take a bit longer to fly in, the toy might be shipped as well, and the investment returns could come over a more reasonable time frame. If the investments return 5-15%, the assets double every 5 to 15 years.

In conclusion, many requests are possible, but what can make them impossible is the time frame. With a suitable time frame, much more becomes possible. If we want them sooner, it will come at a higher price. A private jet can fly in a plate of cheese, but with investments, the risk is the ultimate price. The more impossible the request, the higher the risk. Sometimes, the risk can be just too high to accept.

A coin flip with everything at stake could double your fortune in a heartbeat. The highest possible return with the least effort and the shortest wait is a lottery ticket. Everything else will require time and patience.

I’ll let you in on a secret: the easiest way to turn the impossible into possible is to ask for it earlier. It doesn’t work everywhere and always – there are some absolutely impossible asks, but many can be made more likely with a bit more time!

You want that special cheese? Ask the chef before you even arrive. You need the plush toy on the flight? Pack it with you. You want to double your assets? Start investing now. Let’s savor the cheese, enjoy the toy, and anticipate the returns. But also, let’s remember the cost, price, and risk – a more reasonable time frame can make all the difference.

Happy Investing!

Bogumil Baranowski

Published: 8/7/2023

Disclosure:

The information provided in this article represents the opinions of Sicart Associates, LLC (”Sicart”) and is expressed as of the date hereof and is subject to change. Sicart assumes no obligation to update or otherwise revise our opinions or this article. The observations and views expressed herein may be changed by Sicart at any time without notice.

This article is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally.