The Trusty Old Steed

  • JANUARY 19, 2019

“There’s no harm in hoping for the best as long as you’re prepared for the worst.” – Stephen King, Different Seasons

I’ve been told a storm is coming.

I live in New England. It’s beautiful here, especially in wintertime. When my wife and I moved to the area, we bought a house that happens to have a really long driveway – over 700 feet long. I viewed that extended, private driveway as a feature, as the house is set back nicely from the busy road.

Now into our third winter here, my view of the driveway has shifted from feature to curse. No joke – when winter storms pass through, the driveway morphs into a monster of its own, something of costly significance that must be dealt with.

We bought a tractor from the prior homeowners; where they were going, they wouldn’t need it. The tractor is a little over 20 years old now. Every fall, I remove the mower deck and affix a somewhat-rusted snowblower attachment to the front. While that sounds like a capable tool at-the-ready, its anything but: it breaks. A lot. Additionally, you might envision the challenges introduced at the two steep parts of the driveway.

During big storms, I spend a considerable amount of time trying to fix the damn thing; it just can’t handle hefty snowfalls. I wrestle it back into the garage and (in MacGuyver-like fashion) cobble it back to a sub-optimal, somewhat functional operating condition. Rolling out again, I hope to get another 45 minutes of snow-clearing power before another hasty, cold-knuckled repair is required. The mental image of the book, “Hope is Not a Strategy” presents itself with clarity.

My relationship with the tractor is similar to that of an old car. Each summer, I take my trusty steed to the local repair guy, and ask him how many years (months?) before it battles the monster-like driveway for the last time. “Oh, that’s a good tractor! It’s tough – they don’t make ‘em like that anymore. Don’t get rid of it.” And, in old car like fashion, I convince myself that pouring money into it so that I don’t have to invest in new (yet more reliable) options is the proper strategy.

This solution just isn’t working.

Wet and cold, I stagger back into the house, and my wife Jann implores me to hire a local snowplow company. I have a hard time justifying the cost. “But Chip, think about your time. Let’s face it: the driveway becomes a major time suck. Think about how many other things of importance you could be accomplishing if you didn’t spend all those hours each winter clearing the driveway.”

I have to admit it. She’s right.

But, here I sit, knowing the storm is coming, and I’m committed to seeing it through for the rest of this winter. This solution just isn’t working. Ironically, while staring out my office window, it’s sunny right now, even though the storm is five hours away.

The analogy is not lost on me. With two decades of corporate finance experience notched in my belt, the parallels between properly preparing for a storm and preparing for critical business uncertainties are amusingly obvious.

A company’s lifecycle is never just “up and to the right.” Weather (cold rainy days – or in my immediate future, snow – are interspersed with warm sunny days) serves as an excellent metaphor. In a similar example, look closely at a stock market graph: the first thing you’ll notice is that there are ups AND downs.

The experienced park ranger prepares for fast-changing weather conditions – he or she knows that catastrophe awaits the unprepared, unsuspecting soul. Skilled portfolio managers always have fresh options available at their disposal if (when) they suspect one of their stock holdings is about to move unfavorably.

Admittedly, I have planned poorly: 20 inches of snow will arrive shortly, and I am only “sort of” prepared. I mean, I can’t exactly complain that I didn’t know New England winters existed. Obviously, it’s kinda late to make a last ditch change that will make this a relatively painless event. You can imagine the prices that local snowplow companies command when ill-prepared folks call at the last second, in desperation. Undoubtedly, the thought of shoveling 20 inches of snow from a 700-foot long driveway is accompanied by feelings of nervousness and anxiety.

So, do your future self a favor: acknowledge a storm is coming, even if its sunny outside right now. The following is almost categorically true, always: proper prior preparation prevents poor performance. It’s not fun, or sexy, and might even be costlier than you’d like. But reasonable contingency planning, investment and financial hygiene are considerably less costly than the catastrophes that will befall the ill-equipped.

As they say, “Winter is coming.” Prepare ahead of time, and your future self will appreciate your present self.

Update, 8:49pm, Monday January 21: It went better than I feared – only five inches, officially. But the trusty steed called for repairs nonetheless…

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