Evolve Your Investment Strategies with Evolving Technology & Markets

February 23, 2007 – There is something known as martial art’s intuition. Every martial artist that has sparred has experienced this intuition. You know when your sparring partner is going to throw a punch or deliver a chick before they do so. This intuition even translates outside of the dojo in being able to accurately judge the character of complete strangers.

The stronger one’s chi (spirit) is, the stronger is one’s tuition. My sensei used to compare one’s chi to that of a gallon of water sitting in a shack. He said that even if the gallon of water has been sealed that somehow you would know that the water still wouldn’t taste as good as a gallon of water purchased fresh off the shelves of a supermarket even though you know water does not go bad. My sensei said a person’s chi can be like that. From disuse, it can stagnate and become weak. He said that if you’ve ever been in a crowded and you immediately notice someone that enters the room even though that person is not attempting to draw attention to him or herself, then you have been in the presence of a person with very strong chi.

In investing, it is also important not to let your mind or spirit stagnate as well. Markets are dynamic and always evolving so it is important to not remain committed to a certain strategy as a one-size fits all strategy. Someone with a strong investment chi will remain creative in assessing the best ways to invest money as well as the safest ways to invest money. Flexibility, and not rigid adherence to investment concepts, is a key aspect in being able to remain successful in the investment game year after year.

With certain martial arts techniques, though this may seem counter-intuitive to those that do not train in the arts, the use of brute force is actually detrimental. Certain techniques work much better allowing one’s chi, instead of one’s strength, to dominate. I recall a certain class in which my partner was someone much stronger and larger than I. Still, I was able to move him with ease, so much so, that in astonishment, he kept asking. “ How did you do that?” He was astonished because he did not yet understand the concept of chi and how a strong spirit could control and dominate superior physical strength. The key in being able to do this is to always keep the path of energy flowing rather than breaching it. Rigid inflexibility in martial arts often leads to defeat.

In investing, it is no different. The investor that is flexible and willing to seek out better opportunities in foreign markets when domestic markets appear bleak and that is always willing to seek out the ever evolving long tail of investment strategies and analysis will no doubt be rewarded with much better returns than the old dog that refuses to learn new tricks.

I have often heard top money managers in the United States state that they believe the best place for money is in cash when markets turn downward even during periods when the dollar was losing value and when other markets around the world were booming. They would tell clients stay in cash because of their inflexibility to consider other regional markets. This is a prime example of a money manager with stagnant chi. Their investment outlook is so narrowly focused that there no longer remains any moving, evolving element in their strategies or advice.

If you have a financial consultant that sounds like a broken record, and has been telling you the same thing for the last five years, most likely you have a consultant with no investment chi.

If the broken record approach worked during earlier stages of your investment career, most likely the success of such a stagnant approach was due to the fact that all stocks were swept up in a rising tide, and the approach was much more lucky than effective. However, today’s market is a very different one. And for success today, flexibility and evolution in thought, analysis, and strategy are key.


J.S. Kim is the founder and Managing Director of maalamalama, a comprehensive online investment course that uses novel, proprietary advanced wealth planning techniques and the long tail of investing to identify low-risk, high-reward investment opportunities that seek to yield 25% or greater annual returns.

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