Just Part of the Deal
Welcome to issue #37 of The Davem Dish. Every week I share what actually works in investing based on my 20 years of wins, losses and expensive lessons. You’ll also get my thoughts on solopreneurship and life in general because the same principles apply — keep it simple, stay consistent and focus on what matters.
A few months ago, I decided to tackle a bucket list bike ride across the Monarch Crest. This is a long, backcountry ride across part of the Colorado Trail, which itself is an approximately 500-mile trek with average elevation above 10,000 feet. I recruited my buddy Mike to join me. We packed the essentials — post ride beer being the most essential — and headed to the top of Monarch Pass. We were on our way. It was a beautiful day and luckily the smoke from three nearby wildfires was blowing somewhere else.
Everything was going great and we were about ten miles in when Mike commented, “I’m surprised how smooth everything is going”, which we all know is the kiss of death. Not five minutes later, my foot slipped off the pedal, and it slammed into my shin for the dreaded “pedal bite”. No big deal, we didn’t even stop. But we did have to stop a little while after that when I got a flat tire in the middle of literal nowhere, with no cell service, and another 8 miles or so from where we were supposed to end up. It took us a few minutes (more like 30 minutes) but we ended up fixing the flat and finishing the ride on the bike instead of walking it out. When I said something to the effect of “well, that kinda sucked”, Mike responded, “just part of the deal when riding bikes”. And he was right. It didn’t ruin the day or take away from the experience. Just a hiccup. But it got me thinking about black and white thinking and the gap between how we picture progress and how progress actually shows up. The same error I almost made that day I’ve made many times before.
1% Better
You’ve likely heard the phrase “1% better” by now. Popularized in Atomic Habits, it’s a simple mental model. Choose one thing to improve slightly each day. Initially the changes will appear minimal but over time, the daily improvements will accumulate to a big change. I like the concept. Simple and actionable.
It’s also a seductive pitch that borrows from the same place us investors respect — the smooth line of compound interest. Put in a little effort (money) consistently, let it stack and within a few months (years) you’re on your way to financial freedom. Every retirement brochure has the chart of the clean exponential curve climbing up and to the right.
Except in real life, it’s not so simple. You’ve seen an actual stock chart. The real line is jagged. It can drop or stall and you start wondering in the short-term whether it will work. The daily experience and the long-term direction are two different things.
Progress on anything — a skill, a portfolio, a business — works the same way. The line doesn’t just rise. It can break and it breaks in four different ways.
1/ Someone Blocks You
You’re moving, making progress, checking things off, and then suddenly you’re stuck waiting on someone else. This happens endlessly in the corporate world. Of course, you can do things to keep the ball moving but you know that feeling when you just wish everyone did their part and nothing slowed you down? I’m fine with slow progress. I don’t mind the grind, but when something happens where I’m stuck or waiting on someone else, I would get annoyed to no end. I was recently describing this kind of situation with a coaching mentor and he offered a simple reframe I never internalized. I’ll come back to it, because it applies to all four breaks.
2/ You Regress
This one stings more, because there’s no one else to blame.
About a month before the Monarch Crest trip, I bought a new bike and was riding more frequently along with steeper, more difficult terrain. With the extra practice I noticed I was improving — clearing sections that used to stop me and riding features I would have walked around a few months earlier. Then came a stretch of crashes and blown sections and my newfound confidence dropped. I thought I was getting better but maybe I wasn’t.
Every new entrepreneur knows this arc. You launch the thing and are in beginner hell. But then you get some wins and your confidence builds with results. You’re off to the races (and riches). Not quite says the universe and invariably the messy middle arrives where a launch flops, you dip below the monthly baseline revenue you thought you’ve established, your audience seems to go radio silent. The early wave of confidence and results makes the regression feel like failure instead of a phase.
It’s frustrating. There is no other way to describe it, even if you recognize in the moment where you are and keep a positive outlook.
In the five years of our coaching business, it seems like each year we hit a messy middle phase. We think a new offer, consistent marketing, or better systems are helping us achieve a new level and it does for short periods. And then it doesn’t and it feels like you’re back to the drawing board again.
3/ The Grind Becomes Invisible
Sometimes the line doesn’t drop but it just flattens, which is arguably worse, because at least a drop gives you something urgent to react to.
You keep doing the work — the reps, the weekly contributions, the publishing schedule — and nothing visible happens. The subscriber count barely moves week after week. The sales stagnate. Everything the books and gurus told you to do, you’re doing but you’re not seeing the outcomes the way you envisioned.
This is the stretch where most people quit. And rightly so. If you’re not seeing the expected results from your efforts, then your time is better spent elsewhere, right? Except the flat line is usually a measurement problem, not a progress problem. The visible metrics are lagging the invisible ones. Your efforts are compounding in places the scoreboard doesn’t track — skill, judgement, pattern recognition, resiliency — and the payoff can arrive in lumps, not increments.
Hendrik Bessembinder’s research on stock returns shows how lumpy the payoff can be. Studying decades of data, he found that the majority of long-run wealth creation comes from a small fraction of stocks, while most individual stocks underperform treasury bills over their lifetimes. The same can be true of your own portfolio or your business marketing. A few positions can drive most of your returns and a few pieces of content can bring in most or your audience, but you don’t know which ones ahead of time. This invisible grind of running your full analysis on every position or publishing every week is what keeps you exposed to the winners when they reveal themselves.
4/ The Comparison Trap
This one you inflict on yourself with your ego. Your line might be doing fine and what’s typical for the stage you’re in and then you check your feed. A creator who you don’t think is that great and started after you, posts that they just crossed 1,000 subscribers. Suddenly your perfectly healthy line looks pathetic, because you’re no longer measuring it against where you started. You’re measuring it against someone else’s highlight reel, where you have no idea what they did to get there. When you compare your complete information against someone else’s curated fragment, you lose every time.
Expect It
During the pandemic I started doing puzzles. I enjoyed the slow mental break and completed about a dozen 1000 piece puzzles until I got stuck on a hard one. No progress this time, just pieces scattered on the table for a week. The line broke and I quit. Haven’t done a puzzle since.
Back then there was no one telling me, “a hard section is just part of the deal”. So the bad stretch didn’t register as a bump or a single broken line but as a verdict. And that’s what the breaks do when you’re not anticipating them. They convince you to stop.
Which brings me back to the coaching mentor. When I described how getting stuck gets under my skin, his reframe was simple. Instead of getting bent out of shape when something slows your progress, expect it. Build the interruptions into your plan from the start. If your picture of progress already includes the flat tire, then you know you’re still on the right trail. Oftentimes the simple advice is the best advice.
Expecting the breaks also requires realistic expectations about the timeline. In Mastery, Robert Greene makes the argument that proficiency at anything demands an enormous volume of reps — he puts it around 10,000 hours of real practice — and none of the masters he studied skipped phases to get there. If the path you’re on is likely to take years, then a rough month can’t be a verdict on it. The sample is too small to mean anything.
What Greene’s framework doesn’t capture is how those years feel like from the inside. Knowing you’re in beginner hell doesn’t make it any easier. The messy middle is never enjoyable. But there’s a difference between a phase feeling bad and it meaning something bad. When you expect line breaks, the humbling is a learning experience. When you don’t, you may quit a game you were actually winning.
The Floor and the Noise
Any progress line is really two things stacked on top of each other. There’s the noise — the daily fluctuations, the crashes, the flat weeks, the comparison induced ego spirals. And then there’s the actual floor. Your baseline capability or the thing you couldn’t do six months ago that you do now without thinking. The noise is constant. The floor moves slowly with reps and almost never moves backward.
On Monarch Crest, the pedal bit and the flat tire were noise. Being capable of riding Monarch Crest at all was the floor and a year earlier it didn’t exist. Your portfolio’s value on any Tuesday is noise. Your process, discipline with buying and selling, and your ability to sit through a drawdown without doing anything stupid is the floor. Your follower count is noise. The offer that works, the audience that trusts you — that’s the floor.
Nearly everything that makes progress feel like failure comes from reading the noise as if it were the floor. And nearly everything that actually compounds lives in the line that can’t always be seen.
So expect the line to break. It’s just part of the deal. And when it does, ask yourself did the floor move or was that just noise? Only one of those deserves your attention.
Cheers,
Andrew
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The content provided are personal opinions and presented for educational purposes only, as of the date published or indicated. Davem Advisors LLC is not a bank, licensed securities dealer, broker or investment advisor. Displayed returns are unaudited. Nothing stated constitutes a recommendation or advice as to whether any investment is suitable for a particular investor. You alone are solely responsible for determining whether any investment, strategy or service is appropriate for your objectives. Past performance is no guarantee of future results. Inherent in any investment is the risk of loss.