My understanding of farming grew as I enjoyed playing life simulation games when I was 8. One of my favorite games of that genre was Harvest Moon. The game's goal is to manage an abandoned farm and livestock to restore it to its former glory.
At the beginning of the game, the main character is only given minimal starting capital. I really enjoyed compounding wealth in the game; players with less suitable characteristics would not find enjoyment in playing this game because it requires patience and careful calculation to succeed.
Furthermore, I listened to my father's childhood experiences working at my grandfather's farm in Parit Tengkorak, Pontianak. He would wake up at 4 a.m. every day and then start clearing weeds that threatened the plants while using dogs to chase away the rats that disturbed the crops. He then harvested the crops together with my uncle and during the day, they sold the crops at the city market.
5 keys wisdom from the farm to investment
From those experiences, I’ve learned the similarity between farming and investing. Both getting a load of fully ripened and fresh crops, and success in investing greatly depend on “the farmer's” or “the investor's” persistence and patience.
I came to the conclusion that a capital allocator should adhere to five key wisdoms:
- like plants; businesses need suitable seeds, soil, and care
- good results take time
- accumulating experience and knowledge aid in portfolio management
- remember the existence of factors beyond our control
- happiness is not just about seeing the results.
First of all, a well-maintained farm reflects one's philosophy of life on how to build and care for something with persistence and patience. The establishment phase, like selecting the right seeds and meticulously preparing the soil, is akin to business. If both are done well, the business can be built and grown.
Once the seedlings have grown, they enter the nurturing phase, where plants are consistently watered and fertilized. Watering and fertilizing are decisions made by the team and management. To create a profitable business requires oversight and attention from the owner.
Secondly, each plant yields different results—some are quick, some are slow. Regardless, I believe that good results cannot be achieved overnight. Just because a plant doesn’t yield results overnight doesn’t mean it should be uprooted.
Instead, it should continue to be cared for attentively. This parallels investing, where success requires time and patience—not just a focus on quick profits, but waiting for the business to yield results in due time.
Thirdly, I kept records of the plants in the game Harvest Moon, knowing the appropriate seasons and the return on investment for each plant. Recording experiences and knowledge is invaluable.
I apply this to my investments as well. I know about more than 250 companies worldwide, from their seeds to their caretakers. I liken these records to an investment archive that helps me make precise investment decisions.
Fourthly, it must be acknowledged that there are factors beyond human control. Although we have taken care of the plants well, the final outcome depends on external factors too, like weather or pests. Both can ruin your good work all of a sudden.
Similarly in investments, government interventions, business competition, macroeconomic conditions, and geopolitical conditions can directly and indirectly influence business performance. Conversely, luck can present unforeseen opportunities.
Lastly, happiness is not just about seeing the lush farm or the growing investment portfolio. The happiness I feel lies in the process itself: caring for plants with love, learning from every mistake, and seeing growth both on the farm and in investment life. The crops we earn can be shared with loved ones or used as capital for further investment.
Farming and investing reflect how we build our lives with genuine heart, patience, and persistence. These are crucial traits for becoming a wise capital allocator. It serves as a reminder that the investments, decisions, and hard work we undertake now can create a better future, not just for ourselves but for others as well.
