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Wednesday, 26 October 2011

The fox and the rabbit (Do safety nets help or hinder?)

Once upon a time (not another bloody farm story!), in an enchanted forest where the animals talk like humans do (you happy now?), there lived a big bad wolf who was the big boss man of the forest.

The wolf has a lackey in the fox. The fox never fails to seize every opportunity to please and suck up to the wolf. It’s not all altruistic. By siding with the wolf, the fox can gain from the scraps that the wolf throws at him from time to time…

One day, while both of them were searching for prey to ease their hunger pangs – they have not eaten anything for 2 days now – they spotted a rabbit nibbling at the carrot patch some 20 metres away.

The fox said confidently, “Boss, I see dinner! I will catch the rabbit for you. No need to trouble yourself for this small prey.”  

The wolf looked at the fox and then spied at the rabbit and smiled, “Don’t bother… I bet you can’t catch it.”

The fox was not offended. He just gave the wolf a wry smile and gave chase to the rabbit immediately. The fox thought to himself, “The silly old wolf thought I don’t know. He is using reverse psychology on me to spur me on!”

After 10 minutes of fruitless chasing in circles, the fox finally gave up and walked sheepishly back to the wolf.

“How did you now I can’t catch the rabbit?” asked the fox and he tries to catch his breath.

The wolf patted his front paw on the fox’s shoulder and laughed, “My young friend, you ran for dinner; but the rabbit ran for his life!”

Both of them had a good laugh despite their growling stomachs. And off they went searching for “less motivated” prey.

Acknowledgement: This story was inspired by La Papillion’s comment in a blog quoting Star Wars' Jedi master Yoda: There is only do or do not – there is no “try”.

Can you see the link between the fox and the rabbit and the below pairs?

1)   A salaried worker and an entrepreneur?

2)   A part-time trader trading for extra pocket money and a full-time trader trading for a living?

3)   An investor investing to protect his wealth versus an investor investing to grow his wealth?

The ancient Chinese in their infinite wisdom have 2 idioms for it:

破釜沉舟; 背水一战

So would more safety nets help or hinder our journey towards financial freedom?


  1. great post! full marks!

    you just touch on the key for successful trading and investing. survival and protection.

    if you think of $$$ and more $$$, you will be out of the game pretty soon.

  2. the answer to your question is ofcos, there is no safety net, its just your illusion (that you are safe).

  3. i give an example, if you put a million in a safe deposit and the stock market jump a 100%, you are actually losing big time without aware of it.

  4. When we come across a big Hole in the ground. Some will see it as danger and jump over it and move on.

    Some will see it as opportunity to explore and jump into it.

    Once they are in it; soon they will be frenzy digging themselves out of the Hole.

    Some will dig up Gold while others will dig up lots of shits.

  5. 1) Kum sia Coconut!

    The most dangerous is to think you have (or ask for) safety net (CPF approved, MAS approved, SGX approved...) - do our homework and when kenna conned, just man up and move on. It goes with the territory.

    2) CW8888,

    I love your dig hole analogy! I would jump in. Even only got shit, at least if I lose my job, I still can put on my resume I got hole digging experience!

    (I am now thinking something naughty... Don't know why this American gigolo image comes to mind!? LOL!)

  6. Hi SMOL

    It depends, some who have more would risk less. Some who have less may risk more.

    Different people will react differently. For me, I would say having a safety net makes me more risk adverse.

    You seem to like writing in parables. :-)

    Be well and prosper.

  7. Hello Panzer,

    LOL! Maybe I should be an evangelist instead?

    Telling stories and parables is interesting in the sense I may hide certain ideas between the lines - but others may see another totally different perspective that's equally valid!

    And I go, "Hey! Why didn't think of that!?"

    I share; but receive much more. For that I am grateful.

    Chinese say "throw brick attract jade?"


  8. Hi SMOL,
    Who says there is no safety net?

    "“The Essence of Investment Management is the Management of Risks, not the Management of returns”, Benjamin Graham.

    “Therefore Proper Allocation of Assets and Entry Level are the 2 most crucial actions.
    Nothing you can do is better to Control Risks and Generate profit,” Dick Davis.

    If you can put the above 2 wisdom into practice, that's shall be your "safety net". Though it may not be perfect.

  9. Thanks Temperament!

    There is also: "Attack is the best form of defence"...

    I've realised that the bigger my portfolio grows, the more "conservative" I've become.

    But being "conservative" was not how my portfolio got here in the first place.

    There lies the dilemma...

  10. "defence is also the best way before the attack".

    for safety nets, its illogical to say that, my parashuttes are my safety net for sky diving.

    he never ask why the f... did he go sky diving at the first place?

  11. Coconut, booooooo!

    You play like Italy football? Defense than counter-attack? Boooooo!

    Eh... Why skydiving? To feel ALIVE!
    To feel the adrenaline rush and the wind in our face as we stare death in the face!

    Come to think of it, we can get the same adrenaline rush if the missus comes home unexpectedly and you and your mistress... ahem... not properly dressed. LOL!

  12. haha sky diving is to feel alive? you will be dead sooner (i say sonner, not sure die).

    if trading and investing is to make money, you will also be poor sooner.

  13. Well coconut,

    We only live once! Sky diving is on my bucket list ;)


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