How Endurance Running Made Me a Better Investor

I have been running competitively since 7th grade. My first 5K was over twenty-four minutes. By the time I was a freshman I could do it in nineteen. When I was a senior, I could run it in sixteen. In my last collegiate track season, I could run faster than a sixteen-minute 5K back-to-back while competing in the 10,000-meter event. This year, before the NCAA canceled spring sports due to COVID-19, I was gearing up to run faster than a fifteen-minute 5K twice in a row. How did I improve so drastically? I learned a few lessons along the way.

Patience

There is no guaranteed, quick-fix way to improve as a runner. Consistent, long-term, hard work has no substitute in endurance sports. Fitness compounds. Anyone who has ever worked out for a consistent period in their life has experienced this. After the first time you go to the gym, the next day you can barely get out of bed. A few weeks later, you are lifting heavier weights, and you are still completely functional (albeit a little sore) the next day. Running is the same way. When I started, I was running twenty miles a week. During my senior year of undergrad, I was running one hundred miles.

My approach to training and investing are the same. A long-term time horizon with consistent gains is the smarter, safer method (see Dillon’s most recent blog for more details there). “Get fast quick” or “get rich quick” schemes are unsustainable, and their associated risks are insurmountable. Unlike most investment companies, RPM Capital operates using a long-term horizon. By using extreme patience in the capital allocation process, we deploy focused permanent capital. Our goal is to compound capital for decades to come.

Learning from Mistakes

No training cycle is going to be perfect. Training mistakes, nagging injuries, and mental fatigue are going to come with every season. Recognizing where you went wrong at the end is something every runner can do, but it is meaningless if you do not learn. At the end of every season, I would make a list of mistakes I had made, and then make a list of corrective actions to ensure I would not tumble into the same pitfalls. Every season the list would get shorter, and I would get faster.

Every investor has made mistakes over their career. Even arguably the greatest investor, Warren Buffett, has a running list of investment decisions he regrets. At RPM Capital, we know we do not have it all figured out and never will - mistakes will be made. By finding a balance between confidence in our positions and acceptance when we are wrong, we can learn new things and control hubris.

Being Process-Driven

Running is almost entirely about the process. On the path toward a peak race, an athlete will run hundreds of miles, do dozens of workouts, and eat hundreds of thousands of calories. Not to mention other activities such as building strength in the weight room, getting excellent sleep, and rehabbing the body to avoid injury. Ironically, most of the time spent training for a race is done outside of the training shoes. Countless hours of preparation all go into a few short minutes on race day. Truly, there is no glory without the grind.

Our investment strategy at RPM Capital is also process-driven. We believe learning is a mindset and philosophy, and we are committed to the process of growing and improving ourselves through unconstrained reading, acting boldly in the face of uncertainty, and embracing and adapting from failure. By taking our opportunity set of both private and public essential service companies through a rigorous checklist and conducting countless hours of due diligence, we revel in the process.

If you are a process-driven entrepreneur who values patience, learns from your mistakes, and is looking to sell your business, reach out to us. We would enjoy conversing with you.

Finally, I would be remiss if I wrote a blog about running without mentioning my coach at Walsh University, Rob Mizicko. His favorite expression is “enjoy the journey,” and as the newest member of the RPM Capital team, I am grateful to be on this journey, and thoroughly enjoying it, with you all.