Close Enough is Underrated
Close Enough is Underrated
This piece goes against conventional thinking, at least that which we admit aloud to others even if we intuitively understand it deep down.
Reflecting on my investment moves, I’ve realized I treat decisions the same way as other aspects of life - close enough is good enough. While I could spend time and effort and strive for perfection which is always hard to obtain, most of the work is already done by making the big decisions up front and taking necessary action. The rest is fine-tuning.
Close enough and directionally accurate has always been a path to accomplishment and success for me. This is not to say I settle for mediocrity, but I’m realistic enough to realize perfection takes too long and, in most life and investment instances, just isn’t required.
Overall I’ve never considered myself a concerted expert at anything, but I’ve had great success in my chosen endeavors. Making the big decisions or moves when they need to be made is critical. Delaying can be detrimental. The details and fine tuning can come later as required, but their resultant benefits are often incremental and pale insignificantly once the big move has been made.
Everyday life is the most obvious example. If you are planning a holiday, do you need to plan every hour of every day, your entire itinerary, every place you’ll visit, each restaurant you’ll eat at, and every attraction you want to see down to precise detail? Or will close enough suffice? Book the flights and accommodation, have a rough idea of where you want to go, then experience and decide on the rest when you get there? I think this example is simple and intuitive enough that most will get it. But what about more significant decisions in life? Many will get caught up when it comes to bigger decisions.
I’ll share a few examples from my life to illustrate my thesis.
In business, my ethos had a dramatic impact on my life. A decade or so into running my first business, I noticed customer commentary about online offerings appearing. Nothing huge, but a few comments here and there were enough for me to start paying attention. I decided to give online a shot. I wasn’t the first to make a move, and despite plenty of sweat equity, I was also never the best. What matters is that I launched a site, got the product out there for eyeballs to see, and it moved forward from there and turned out to be a runaway success. If I had waited for the perfect timing, involved multiple parties to help, sought out expert opinions, and asked suppliers’ permission in an industry not yet amenable to e-commerce, I would have been much later to the party, if at all, and a lot lower in the resultant pecking order. Waiting for all the ducks to fall in a row would have been catastrophic and delayed me for years.
On a personal level, my thesis resulted in freedom. When the world turned to sh!t during covid and my country was forcing clot shots, restricting access and freedoms for everything, and closing its borders, I promptly decided that it was time to get out before life became too difficult and I lost all my freedoms. Too many times through history we have seen examples of oppressed people that figured they would wait a little longer; one more step isn’t so bad. Not me. Years earlier, I had heard from a friend about a small island he lived on and figured again that close enough is good enough. If I had waited, explored multiple options, and felt the need to visit and prepare everything beforehand, I might never have made a move. I was out within months, enjoying freedom those I left behind could only dream of.
I have implemented this ethos in my investments, especially when analyzing macro trends and geopolitical movements. Let’s take a look at the four current themes I’m invested in and how I utilized my ‘close enough’ strategy;
The world is turning into a fiat shit pile. There is no turning back from the (hyper)inflation spiral governments and central banks have kicked off. Do I need to analyze every facet and decide what the Fed will do with rates, what policy will be tweaked by the government this month, what bonds might do if this does that, what if this govt does this with its currency instead of that etc.? No, I established a sizable position in Bitcoin outside the current system as a hedge, then sit back and watch as all fiat gets debased to confetti vs. sound money over the coming decade, safe in knowing I have insanity insurance.
Recently Russian stocks were slammed after the conflict with Ukraine escalated in late February. The market hit all Russian stocks down 60, 70, 80, and 90%! Did I need to analyze each stock’s fundamentals? Did I wait a few weeks to see where the political winds were blowing? Did I hold out to wait for xxx stock to fall 85% instead of the 80% it was at? I know multiple people that did.
No, within hours (and subsequent days), I bought whatever Russian equities I could get my hands on before brokers and exchanges shut the door. Within a few weeks, when the MOEX re-opened, I was looking at 20/50/80/140% gains. We’re still early in this play, and volatility will be intense, but without immediate action, I would have been locked out like the rest of the west is now. As an aside, it does help that I have an interest and understanding of the actual state of play in Russia, not the idiot-colored glasses version painted in the west for the last hundred plus years.
While I may ramble a lot, these ideas and thoughts along the way clarify my thinking. When a catalyst arrives, I’m ready with sufficient (not perfect) knowledge to make a decision and seize an opportunity. It would be unwise to use ‘close enough is good enough’ in an area you have absolutely no knowledge in.
“Perfection is the enemy of progress.” - Winston Churchill
The world is running short on uranium, just as reactor build-outs continue to ramp up and nations progressively drop the scaremongering around nuclear power. They’re now accepting there is no choice if they are to stick to their (flawed and inaccurate) narrative that the environment is dying and we’ll all be swimming to work in 10yrs… or dead (have the Maldives slid into the ocean yet? Still not? Ok). Do I need to understand every intricacy of their flawed motives reasoning behind climate change? No. I only need to know they’ll continue with ridiculous energy policies that force a move to nuclear.
Do I need to research and find the exact best play in the uranium market? That miner that’s been overlooked or has a high likelihood of a massive deposit only three drill samplings away from being discovered? Sure, this would be a great find and skyrocket the returns, and there will be many deeply involved in the industry that can do this. The added risk aside, for those such as myself not deeply immersed in the industry, close enough works for my money. I’ll buy the ETF with a broad cross-section of all the players. When uranium goes up, the returns on this will still be fantastic, and I don’t need to spend day and night reading drill results and industry news or live in fear of one miner going belly up.
The world is being vandalized by criminals in power looking to seize control over everything. They sabotage national energy security, pushing woke and ESG agendas to further their stranglehold on everything. They are using whatever reasoning the gullible masses will accept to malign and ostracize hydrocarbons that have kept progressing humanity’s economic and social development for hundreds of years - coal, oil, and to a lesser extent natural gas.
Do I need to understand the intricacies of everything to do with the oil and coal markets? No, though I have enjoyed books on oil geopolitics in the past. Do I need to understand the factors and vectors associated with solar and wind? No, I need to realize that windmills and solar panels take a sh!tload of commodities to produce. That we’ll still be reliant on the evil hydrocarbons for years to come. I need to understand that woke fund managers are being forced to divest themselves of said hydrocarbon stocks and that half of those companies in the west are being forced to rid themselves of their profitable assets, all at the altar of the ESG Gods.
I know that close enough is good enough when the valuations of such equities are trading at 1-5x cash flow and they have low Capex requirements. I spend some time to make sure I’m not buying specific duds and try to select the ones with the best prospects, then throw some money into a whole range of commodities, sit back and watch the suicidal idiots that run the world at present to keep messing up on purpose, knowing that without consequences, they’ll keep doing it.
Close enough execution has worked well in my life. I have seen friends close to me get bogged down in indecision or worse yet, apathy to make the meaningful moves they know deep down they should - they tell me as much, yet they still fail to act. I suppose I’ve always been fortunate to have an impulsive, risk-tolerant view on business and investing which has been a huge advantage. Still, even without that, I don’t suffer from paralysis to the extreme that many do.
If you have good instincts that have been proven right, then go with them. I’m not saying bet everything on one play - in life or investing - but remember that directionally accurate is usually sufficient to get you close enough to where you want to go. Once you’re there, you can iron out the finer details. Or move on to the next aspect of life to keep you succeeding, enjoying, and living happily.
This article is not a claim that generalists win out. While a vast itinerary of knowledge is valuable and interesting, I believe there must be at least some specialization to avoid going in the opposite direction. Someone that knows only twenty percent of many varied subjects is pretty useless to himself and others for any decisions to have a chance at success with any certainty.
I have in-depth knowledge of subjects that take my interest; however, I also realize that there is never an end state of knowledge on such complex topics as Bitcoin, Russia, and geopolitics. I will be a student for life. So by default, close enough must be good enough not to be paralyzed by inaction.
“Have no fear of perfection - you’ll never reach it.” - Salvador Dali
Next time you need to decide or are presented with an opportunity, ask yourself; what is your instinct telling you? Do you have a reasonable belief based on your knowledge that you’re correct? If you don’t nail it, what’s the downside?
If ‘close enough’ gets you further along in life, it’s nothing to be embarrassed about. Maybe it’s worth diving in? Done is better than perfect, and it’s certainly better than doing nothing.
Close enough has been good enough for me. How about you?
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