What Flying Taught Me About Investing

Having discipline as a trader and an investor isn’t easy.

In today’s world of influencers—and finfluencers—bragging about how much money they’re making owning this stock or that stock, it’s easy to chase the hype. Especially if you don’t realize all they’re trying to do is get you to click so they can pad their own pockets.

The worst thing you can do is buy into the mania and chase something that may end up making things worse.

While still in high school, years before jumping into the trading world, I had an interest in flying. Fortunately for me, my high school had a flight program where students could learn how to fly and even obtain their private pilot licenses.

So during my senior year, I jumped in hoping to graduate with my license in hand.

Luckily, I had two close friends that wanted to do the same. (Both of them are commercial pilots today.) So we took the leap and hopped in the cockpit, and off we went.

It’s an exhilarating experience. It’s freeing gliding through the air and seeing the world from above. And it’s different when you’re in control rather than a passenger looking out the window.

The funny thing is the process of flying a plane isn’t all that different from the process of investing or speculating. You have to have discipline. You have to have conviction. And you have to have an eye on safety.

Maybe just as important, you have to have a system of checks in place before, during, and after a flight. And especially in case of an emergency.

One of the first things you learn before even hopping into the cockpit is to run through your pre-flight checklist. I still have the same checklist my first instructor gave me before my first lesson.

It’s all about safety. Even if everything is working great, a good pilot will always go through their pre-flight checks before taking off. You don’t want to take off thinking the plane is full of fuel when it’s actually empty.

Everything about flying is a process. Taking off. Landing. Keeping in radio contact with different control towers you may happen to pass by.

For example, landing a plane typically happens in a specific pattern. There are five legs of the pattern. Upwind means you’re heading into the wind. Crosswind means you’re crossing over the runway. Downwind is flying with the wind to head into the landing pattern. Base is when you’re perpendicular to the runway before turning into your final approach.

Each step of the landing process requires you to call out your position over the radio. And each has different sequences for preparing to land, like pulling back on the throttle to lower your air speed or lowering the flaps on the wings to help you ease onto the runway.

Once you’re on that final approach, it’s about aiming for your target and sticking the landing.

It’s a process you learn by experience. There’s no substitute.

However, it’s more than that. For instance, there’s a specific checklist pilots go through when there’s an emergency. Something you don’t want to have happen while in the air but you prepare for nonetheless.

In fact, if you want to earn your license, you have to demonstrate emergency procedures during your “check ride.” The check ride is the flight portion of testing before you get your license.

Luckily—or unluckily, depending on how you look at it—I had some practice with an emergency during my training. An actual emergency in the air.

While on a flight with my instructor and my good friend Erik, who tagged along, I noticed something odd while at about 3,000 feet in the air.

Mid-flight, I saw some sort of fluid trickling up the windshield. It was a clear day, so there was no chance of rain. And it wasn’t a clear liquid, so I ruled out water.

After pointing it out to my instructor, we realized the plane was leaking oil. He immediately sprang into action. We turned around and started to head back to our home airport.

He instructed me to continue flying the plane. He instructed Erik to keep an eye on the instrument panel. And he took over the radio calls.

Time seemed to pass slowly. The leak became noticeably worse, with more oil streaking up the windshield.

What was supposed to be a routine flight turned into anything but.

There was no fear, though. No panic.

Our training was all about staying calm. To react and work as a team to safely land the plane.

Eventually, we had the airport in sight. My instructor safely landed the plane. And after getting out of the cockpit, it was nothing but shock. Oil was covering both sides of the plane. Nearly all of what we had started off with was gone.

The problem? A $10 part that feeds oil to the engine broke mid-flight. Something we couldn’t really account for even going through our pre-flight checks.

But the emergency procedures were in place. And we made out just fine in the end.

That experience—and all of my flight training—taught me a great lesson in keeping calm under pressure. It was also a great lesson in how to stay the course.

You see, pilot training isn’t just about learning how to take off and land a plane. It’s also about how to compartmentalize everything.

That’s even more true when there’s an emergency. If you can learn how not to panic and to focus on the task at hand, that gives you a massive edge in solving the problem. Especially when your life may be at stake.

It also helps you take the emotion out of the situation. When you can focus on running through your emergency checklist—or, in my case, on continuing my heading while my friend watched the gauges—it keeps you busy. It doesn’t give your brain time to panic.

It slows things down so you can see clearly. Then you can come up with a solution and solve the problem.

What flying taught me was ultimately how to manage risk . . . and my emotions. Something that eventually spilled over into my process for both investing and speculating.

And next week, I’ll talk more about how I tie it all together. Stay tuned!

Regards,

Editor, Strategic Trader