The Story of the Good Pig

Investor Jeremy Grantham believes that individual investors have two advantages over professionals: they don’t have to worry about protecting their job or business risks, and they don’t suffer from over-management caused by the need to appear busy.

Unlike professionals, individuals don’t face the threat of losing their job due to underperformance or criticism for not taking action in a slow market. Grantham advises that individuals can benefit from waiting patiently for the right opportunities and not worrying about the actions of others. The story of “The Good Pig” is given as an illustration of competition in the world.

A helpful illustration of the competition that exists in the world can be found in the story of “The Good Pig”:

“So I went to Ireland, and my car broke down. Luckily, a farmer was nearby who invited me in
for dinner while I waited for a mechanic. Walking around the premises, I saw a pig with only three legs. Surprised, I asked him, ‘Excuse me, why does your pig only have three legs?”

And the farmer said, ‘Oh, well, see, this pig here’s name is Paddy, and let me tell you a story
about him. One day, I was out on my tractor when something went wrong and the tractor accidentally got turned over. I was going to be crushed and would have died, ‘cept Paddy here ran over and dragged me out. He saved my life that day, he did.’

And I said, ‘WOW! That’s amazing! So he lost a leg while rescuing you?’

And the farmer said, ‘No, but let me tell you a story. My son was fishing in the pond when, all of a
sudden, he fell right in. And somehow, his foot got trapped in a reed in the pond. He would’ve drowned to death if Paddy hadn’t run outside, untangled him, dragged him out from the pond, and applied snout-to-mouth resuscitation. He saved his life that day, he did!’

And I said, ‘Incredible! So that’s why he has only three legs?’

And the farmer said, ‘No. But let me tell you a story. My daughter was getting water from the
well. All of a sudden, she fell right in! And she screamed and screamed, but no one could hear her. She would’ve died, ‘cept Paddy here ran outside and rescued her. He saved her life that day, he did.’

‘Unbelievable! But why does he have only three legs?’

And the farmer said, ‘Well, you wouldn’t eat a pig that special in one go, now would you?’”

What does this story mean? The investment world can be cruel and ruthless: it is “eat what you kill,” and most people will act in their own interest. This applies to “professional” advisors with Ivy-league degrees and fancy titles in spacious offices, or the talk show hosts you see on CNBC and Bloomberg.

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