The Small Steps of Giant Leaps – Compounding Small Actions in Investing and Trading

The headline “The Small Steps of Giant Leaps” is “stolen” from a blog post published on Farnham Street.

What is Farnham Street?

There is no coincidence that the webpage is called Farnham Street. Shane Parrish, the founder of Farnham Street, simply used the address of his favourite company:

Berkshire Hathaway, 3555 Farnam Street.

Parrish is an admirer of the duo behind Berkshire – Warren Buffett and Charlie Munger. The inspiration of the blog emanated from the ideas of billionaire investor Warren Buffett and his business partner Charlie Munger.

And Farnham Street is all about ideas, thinking, and philosophy.

The mentioned blog post is about the small steps you take in everyday life and how they add up to giant leaps in the future.

The position you find yourself in today is the accumulation of the small choices that you’ve been making for years……On the first day, the difference between the choices that help us and the choices that hurt us isn’t noticeable. But as the days turn to weeks, weeks into years, and years into decades do the small choices create massively different results.

You might ask, what has this to with trading or investing?

A lot. The best way to learn is by trial and error. Be meticulous, persistent, and accurate. Keep a trading journal and you’ll make sure you learn something every day.

Your choices and actions compound. It’s like a sailing boat crossing the Pacific. One degree off the mark is hardly noticeable, but over vast distances you’ll miss your destination by a wide margin.

Excelling at the small choices that compound over time perpetually leaves you in favorable circumstances. No matter what happens in the world, you’re never in a position where you are forced into a bad decision. 

Good results require hard work, and trading is certainly no different.