You Will Have A Problem With This Position
Things never all go right for me. Something is always going wrong, somewhere. You too? I now have the insight on how to react to constant setbacks. Here it is.
The funds manager sat opposite me, drinking his morning coffee. “How’s the fund going?” I asked this now entrepreneur, who had started his own investment fund, managing other people’s (and his own) money. “Pretty good,” he replied, “except……” This insight gave me the clarity on how to approach setbacks and problems. This is what he told me.
You’ll always have a problem position.
For a funds manager, you might select say seven investments to ’take a position’ in. A year later, four might be performing brilliantly, two just so-so, but guaranteed, there will always be one that is not going well – it’s a ‘problem position.’
That resonated with me. My business and life is never on an even keel. No matter how well many things might be going, there is always something dragging me back: a dysfunctional client, relationship, collaboration, investment, partnership… I always have at least one gnarly ‘problem position.’
“So what do you do about that problem position?” I asked. It was his next advice where the magic lay.
“I get out of it. The key is not to focus on money lost. Rather, focus on what you are going to do next with the money you salvaged from that problem position. Face reality, move decisively, take your losses, learn all you can, and focus on how to use the funds available to find a better opportunity and to find growth.”
So much energy and angst can be sunk into our ‘problem positions.’ They can overwhelm and drag back the positive momentum and optimism we have in so much else we do. One of my many failings is I tend to ‘hope for the best.’ I keep confident that things will improve. I think the best of people or situations. And take little or slow action. Often, I even put more energy behind that ‘bad position’ to try to turn it around (‘throwing good money after bad.’)
The good funds manager’s eye, though, is far more clinical and unemotional. He or she knows there is likely always to be ‘a problem position’ somewhere. My sense is my friend is a very good funds manager. He does not pontificate, bite his nails, fret and pray for improvement. Hope is not a plan. He analyses the situation carefully, and then quickly exits the position, with all energies and focus on what to do next to produce a better outcome.
What are the ‘problem positions’ in your business, career or life right now?
What are the issues or circumstances that cloud your vibe, pull you back, cause butterflies, deplete? And what are you doing about it to move on from them?
Sure, sometimes you can’t just exit. The problem might be with a family relationship. Nevertheless, by being more clinical on how you expend energy against that issue, that’s the key.
We all would like everything to be great at one time. It’s just so rare. As actor David Niven used to say: ”When the rose garden is blooming, the weeds are growing.”
In our lives and work, there is usually a ‘problem position.’ In many cases, the best action is to cut your losses, exit stage left quickly and put all your wonderful capability, ability, passion and love behind things that will give you a better return.
That’s my position anyway.
I sent a draft of this blog post to my funds manager friend. He gave it the thumbs up, with this comment: “There’s an old market saying that ‘your first cut is your best cut’, meaning that, should you decide to exit a position and proceed to do it in bite-sized chunks, your first exit price will turn out to be the best one. Conclusion: exit immediately and move on. I’ve found this to be an amazingly reliable rule and yet I continue to challenge it from time to time………..much to the detriment of performance!” The message: don’t stuff around. Don’t take small measures. If you have a ‘bad position’, face reality, tackle it head on, be decisive, be brave, be bold, and move on to better things.