Lately I can’t stop watching Deadliest Catch on the Discovery Channel. It’s a documentary series that follows Alaska crab fishermen on a dangerous quest for “red gold.” The crews battle atrocious weather, sleep deprivation, gigantic waves, and dangerous equipment in the bitterly cold Bearing Sea.
In the most dangerous job in North America, extreme risk brings extreme reward. A boat that holds a crew of five could potentially land a catch worth close to a million dollars. After the captain takes his cut and pays his bills, each crew member could earn 20, 30, or even $50,000 for a few weeks’ work.
I like the show for a lot of different reasons: I’m a fisherman myself, my girlfriend is from Alaska, and I love it there. I image there must be a real sense of freedom being all alone in one of the most inhospitable places on earth. I bet there’s a real sense of self-sufficiency after a long, hard voyage with no one to take care of you.
I’m also attracted to the raw entrepreneurial aspect of crab fishing. Skippers invest millions of dollars on boats and equipment for a chance to share in riches. Violent storms, icebergs, and potential tragedies stand in their way. Out on the sea, their fortune and the fortunes of their crew are riding on the decisions they make.
From their perch in the skipper’s nest, they must balance strategy, safety, and endurance to bag their treasure. The job requires great vision, management skills, and patience.
To fish for crab, crews bait and drop 800 pound “pots” off the side of the boat to the bottom of the sea. They drop a string of 50, 75, or 100 pots, one every few miles, hoping to land on a honey hole.
Just like in other forms of fishing, no one knows exactly where the crab are hiding. Skippers may have their favorite spots, but they don’t know for sure until they retrieve the pots after a day’s “soak.”
Dropping and retrieving 100 pots is enormous work, which could easily go unrewarded if they’ve chosen the wrong fishing ground. To lessen the risk, some skippers “prospect” for crab by spreading out their pots hoping to find the best spot. Others bet it all on one place, hoping to strike it rich.
Add in unpredictable weather, ice that coats the boat and must be hammered off with a sledge hammer, the possibility of being thrown overboard, and the chance your pots will be covered by ice-pack and lost forever, and you’ve got a heck of a show.
Fishing on Dry Land
Sometimes I daydream that each of my candy vending machines is a crab pot. Over the last two years, I’ve wandered all over Austin and Los Angeles dropping my pots, 44 in all so far. I never really know if it’s going to be a good location until I’ve let it “soak” for about a month.
When I go around to check on them, sometimes they’re duds. Every once in awhile, I find a “honey hole.” I’ve got a few of those now that soak up over $100 a month, and all I have to do is go pick it up.
Let your Investments “Soak”
The more I think about it, the more I realize that all forms of investing are like crab pots. As an investor, you’re the skipper of your own boat. The money you’ve saved and put into your war-chest is like your ship.
Each of your investments is a crab pot: a rental property here, a stock there. Maybe you spread your money around, prospecting for a honey hole. Maybe you bet it all on one spot.
Sometimes you hit a storm. Just the other day, one of my good locations called me up and told me to pick up my machine.
Sometimes you’re “on the crab.”
Other Kinds of Pots
If a blog is your ship, each post is like a crab pot. It’s hard to tell which articles are going to hit and which ones will be looked over. A good article is like a honey hole that feeds you a trickle of income month after month. Lay enough pots and you might build up to a fortune.
A piece of real estate is like a huge pot. If you play your cards right, it might make you a ton of money. If your tenant destroys the place, it might sink your ship.
If you produce videos and put them up on Revver, each one is pot. Lay enough videos and one just might go viral, putting you in the honey hole.
In a stock portfolio, each stock is a pot. How long do you let it soak? Did you spread them out defensively, or do you bet it all on a few?
A business owner lays a pot with each line of merchandise. She adds new lines each year, and trims the ones that aren’t working.
As an artist, you lay a pot with each photo, painting, song, or movie. You can’t expect to get all the crab with one pot. You’ve got to keep working.
What We can Learn from the Crabbers
Lucky for us, we don’t have to risk our lives for our investments; but we can learn from those that do. Without danger and urgency all around us, many investors go soft.
Crab fisherman are tough. They live on 3 hours of sleep a night and work 20 hour days of manual labor. They put their lives on the line by hanging off the boat to untie equipment and getting tossed around deck among huge pieces of equipment. Despite the misery, they don’t complain. They keep focused on the prize.
In fishing your own investments, you can’t just quit when one or two don’t hit. You can’t give up when a storm consumes you. You’ve got to push yourself as far as you can go if you’re going to lay enough pots for one to hit.
If you find a honey hole, take a minute to celebrate, but don’t lay down your guard. You’ve got to get back on the boat and keep laying pots.