June 18, 2020
Steve Jobs was in a bad mood. Apple's tailspin had brought him back to the helm, and at 1997's MacWorld Boston, he started trimming. Product lines, partnerships, entire divisions were pared from the Apple tree. Software developers, angry that products they had coded for years faced irrelevance, openly rebelled. It felt like collapse.
It was a form of collapse. But that's not always bad. "Collapse isn’t necessarily as scary as it sounds, by the way. It’s merely a society’s rapid and involuntary simplification," notes Andreas Kluth of Bloomberg.
In our own lives, collapse can bring benefit when it leads to focus. Here's the simplified, focused life of an early Amazon employee:
One early employee worked so tirelessly over eight months — biking back and forth from work in the very early morning and very late night — that he completely forgot about the blue station wagon that he'd parked near his apartment.
He never had time to read his mail, and when he finally did, he found a handful of parking tickets, a notice that his car had been towed, a few warnings from the towing company, and a final message that his car had been sold at an auction.
No way Wal-Mart was going to compete with that focus. (I identify with this story because the same thing happened to me in Cambridge, MA, about the same time, though I reclaimed my car prior to auction. I petitioned the city to waive the tickets due to "job creation efforts." The city dismissed my case.)
On an investing level, we find value in simplification. As we receive inbound investment statements from new or prospective clients, it often is difficult for us to decode what is happening. The layers of complexity obscure the purpose of different investments. Are investments overlapping, thereby concealing concentration risk? What are the tax ramifications from activity? Where are the fees squirreled away? It all feels out of control.
As we unload positions and scrub the portfolio of its complexity shackles, it feels like a form of collapse. But it's actually rejuvenation.
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