It has been a long-long time since I travelled the dusty plains of my childhood. The one-horse town where I spent my youth is situated in the middle of nowhere, surrounded by what can charitably be described as 'savannah' but 'desert' is probably more accurate. It's one of those towns that has a single post office, one police station and a lone graveyard, but two bars. The main events for the year are (of course) all the school's sporting events, the livestock auctions and the annual fundraiser for the church.

My square mile of kingdom, for the most part, consisted of a number of drab, boxy school and dormitory buildings. It was like the Barbican of London relocated to the middle of the Sahara Desert. From the top of my world you could see for miles and miles in all directions. It was quite liberating to be able to stand on top a three-storey building and have an unobstructed view of the surrounding countryside as far as the eye could see. And the colours! To die for! Early in the morning or late in the afternoon you would have subtle nuances of cream and light brown in the foreground. Further out, greys and light blues would come into play, terminating in the velvety purple mountains 50 to 60 miles out! Framing all of this was the pale blue sky, its colour faded by the harsh sunlight and not a whisper of cloud to be seen. As sunset approached the mountains would change from light purple to crimson. The coup d' grace was a picture-perfect fiery red sunset almost every day of the year.

In my later years, watching sunsets became a hobby of mine. You see, I had moved up in my world and was now living on the top floor. For about two months of the year I would catch the sunset in a large window at the end of a very long corridor. The kind of corridor you can find in a hospital, a dormitory, or any military or government establishment. Sunsets were a pretty impressive sight reflecting off PVC floor tiles polished to a high sheen. I would catch the sunset right after supper and gaze at it for 5 to 10 minutes. While staring at this beautiful view I would contemplate my life, the week ahead or whatever concerned me at the time. Once the sun was gone I would step back into the real world and hit the books for the evening.

Don't be fooled by the apparently simple and tranquil appearance of my world. For, in the most basic terms, this was a piece of land inhabited by energetic young men. Battle lines were constantly being drawn and redrawn while the spoils of the last skirmish were distributed among the victors. My earliest memory of this is the games we used to play as kids. We would take out our toys and descend onto a dusty patch behind the school dormitory, close to a water tap. In a few hours, which felt like a lifetime, we would transform the area into towns, rivers, bridges, farms and railways. Eight-year-old boys would negotiate, plan and build roads together, fight over which direction a river should take, haggle over the price of toys and generally try and outsmart each other to increase the size of their fiefdom. Intermingled with this will be the latest gossip from the school, the local community and, naturally, girls. It is here that I witnessed a girlfriend being swapped for a toy and the very next day a bloody fistfight because the girl predictably didn't embrace the new arrangement as enthusiastically as it was negotiated.

These individual fights grew into better-arranged battles. At some stage we drifted into the world of gangs. Compared to today we were softies. We had our drugs, guns, turf wars and gang-specific slang. However, these came in the form of the odd stolen cigarette, carefully crafted swords and spears, tree houses and secret code words. Most of the energy went into readying for battle. Battle gear would be meticulously planned during the afternoon studying session. During this same session, coded messages would be passed around in which the pecking order was negotiated. Generals were chosen and strategies were developed, all under the watchful eyes of the supervisor for the day. Any of the above acts were punishable by at least 3 lashes with a cane but, of course, they had to catch you first!

As soon as the study session was over we would head out to the battlefield. We would ready ourselves, line up and have a ball. However, as we grew older the gangs were relinquished to the younger boys. This was partly due to boredom and partly due to the intensity of the battles. Things were getting more and more personal and boys were starting to get hurt. So new battlefields were chosen. Football, girlfriends and academics became new areas of contention. However, all of these were marked by clearly defined protocols and a good understanding of when you had won and when you had lost. On the other hand, there was odd occasion where it was just too damn hard to tell right from wrong.

Now, some of you might identify with parts of my story and some might not. In my mind the above pretty much sums up the dynamics at play in the events surrounding September 11th. For all the men involved were once boys. To a large extent the games of their youth were the same. The older they got, the more serious the games. Obviously, the stakes are much higher and most certainly some issues will always be rooted firmly in grey areas. I don't want to downplay or trivialise the horrific acts of that day and my heartfelt condolences go out to all those affected. However, don't be surprised by the unfolding events. History and human nature clearly indicate that events like these are pretty much to be expected. We have been here before and, sadly, we will visit this place again. It appears that the human race is doomed to repeat the mistakes of the past. We have a knack for surpassing our forefathers when it comes to coming up with ingenious ways of further blemishing our disgraceful history on Earth. It appears that the more things change, the more they stay the same. Just wait until the number of homo sapiens hits 12bn on this lovely planet of ours. Then you will see the sparks fly.

As a global investor, one cannot plan for an event such as 9/11. However, one will always be in a better position if you build a margin of safety into an investment. That is something a long-term investor does. It is largely a method to mitigate the unforeseen, the random or the unexpected. It buys you a margin for error - some space for things to go awry in. You can count on boys to play their games in future. You can also rest assured that sensibility, accountability and reasonability will frequently be the first casualties of war. It is ironic that the civil liberties that are held most dear are the first to be sacrificed when a country goes to war supposedly to protect those self-same liberties. To diversify globally helps to minimise the risk of having all your eggs in one (American!) basket. To invest with outstanding management also helps. If it is humanly possible, quality management will find a way out of most difficult situations, even if their predicament is a result of natural disaster, random misfortune or terrorism. As in life, so it is with a good company. You simply cannot keep a good man or a good company down. Personal investments such as Fairfax Financial Holdings, Berkshire Hathaway and Progressive Insurance have been directly affected by 9/11 - to the tune of more than $2bn. Thankfully, not one employee was lost. These companies have dealt with the crisis in an exemplary fashion and they make me proud.

As investors, the lesson we learn from the above is simple: Invest with people and companies that will make you proud. You never know what games the boys will be playing tomorrow.

Next week we will focus on the current series again.

Whatever you are up to, I hope it is profitable and ethical!

Mr. B

mail_mrb@yahoo.com

Posted: 2002/09/16 08:04 View Archive