Risk is what you cannot see
Between 1900 to 1926, American escapologist, and stunt performer Harry Houdini was well known for his escape acts. He amplified his acts to include spectacular and dangerous escapes which involved freeing himself from ropes and chains, escaping from straitjackets or submerged underwater.
Harry Houdini was an amateur boxer and told crowds he could withstand any man’s punch with barely a flinch. He used to invite the strongest man in the audience onstage and ask him to punch him in the stomach as hard as he could.
After a show in 1926 Houdini invited a group of students backstage to meet him. One guy named Gordon Whitehead, walked up and started punching Houdini in the stomach without warning.
Whitehead didn’t mean any harm. He thought he was just re-creating the same trick he had just seen Houdini perform.
But Houdini wasn’t prepared to be punched like he would be onstage. He wasn’t flexing his solar plexus, steadying his stance, and holding his breath like he normally would before the trick. Whitehead caught him off guard.
The next day Houdini woke up doubled over in pain. His appendix was ruptured, almost certainly from Whitehead’s punches… And then Harry Houdini died.
He was probably the most talented person in history at surviving big risks. Tie him up in chains and throw him into a river? No problem. Bury him alive in sand? No issue, he could escape in seconds— because he had a plan.
But a little jab from a student that he didn’t see coming and wasn’t prepared for? That was the biggest risk.
Investment is all about planning and keeping in check what kind of risk we are looking for. If we deviate at all from our path and market catches us off guard, our investment is the immediate sufferer.
At Shalibhadra, we believe in plan, execute and review. We would rather earn less returns but not let entire portfolio suffer because of unnecessary adventures.
Nishit Siddharth Shah