The fox is known for being fast, cunny and sleek. It’s a close relative to the dog and the wolf. Foxes have excellent hearing which allows them to hear low-frequency sounds and rodents digging underground. They are solitary and use magnetic fields to hunt their prey.
While the hedgehogs are nocturnal animals. They sleep during the day and search for food at night. The hedgehog relies on hearing and smell because they have poor eyesight. If a territory is threatened, the hedgehog uses its best weapon: its quills.
What does this have to do with finance or investment? Everything!
In the world of investment, you must know yourself. The kind of player that you are and the system that works for you. There is a common Greek quote that says, “The foxes know many things, but the hedgehog knows one big thing”. The hedgehog understands one simple principle clearly. A hedgehog investor invests based on this principle. It drives the asset class they buy, the type of risk they venture into, and their investment tenor.
The fox investor embraces different principles, often unrelated and sometimes contradictory. They learn different things, invest in different asset classes, hold different assets for different periods, and venture into different kinds of risk.
There is nothing fundamentally wrong with these two categories, but you need to know the type of person you are. Warren Buffet is said to have an investment framework. He sticks to it religiously. He is a hedgehog. On the flip side, Elon Musk is a fox. He is open to any and every type of investment. Some people will only invest in the real estate business. We also have people that invest in the stock, bonds, real estate, crypto markets, etc.
When it all comes down to it, every investor must understand risk. You must know that one “big thing” is called risk. In the end, every investor ends up like a hedgehog. There is one asset class that will always capture our attention. In conclusion, I ask again, are you a hedgehog or a fox?
Cheers to a profitable lifestyle,
TL