In the book The Lions of Winter by Ty Gagne, it’s early winter 1982, a time when rain and snow, thaw and freeze cycles weaken snowpack—the perfect recipe for avalanches.
Today, we know a lot more about avalanches because of technology and recorded data. But we also know more skiers seek untouched snow with better equipment, entering the backcountry sometimes with a false sense of confidence or pure ignorance of the dangers they face and put others in.
Today, we also know this: The Mount Washington Observatory has studied recorded weather data over four decades going back to 1981. The data shows a 27% increase in the number of rain-on-snow days from 2011 to 2020.
Skiing Mt. Washington’s Tuckerman’s Ravine was not something many skiers did back in the early 80s. It was skied mainly because the lifts were closed, and it was the last run before summer. Now, it’s not uncommon to see and hear about skiers up there all winter long.
Which brings us to investing and access to it. Day traders call themselves investors. You know how I view the difference between speculators and investors.
When I think about the brave rescuers in 1982, I think about Ben Graham and his margin of safety. Margin of safety is not a fad. It never goes out of style.
To me, the need for a margin of safety is always a necessity, no matter how much “information” and “trading” is going on. Whether you’re skiing or investing, no amount of new data can protect you from the completely unpredictable. Like a rogue avalanche or a Black Swan event, your margin of safety exists to protect you from what you can’t anticipate.
Action Line: When you want to talk about the margin of safety in your portfolio, email me at ejsmith@yoursurvivalguy.com. Then, click here to subscribe to my free monthly Survive & Thrive letter.
