8 Apr 2024
Surely the most important question when a country goes to war is – What does success look like?
Churchill the wartime Prime Minister left no one in any doubt
“Even though large tracts of Europe and many old and famous states have fallen or may fall into the grip of the Gestapo and all the odious apparatus of Nazi rule, we shall not flag or fail.
“We shall go on to the end, we shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be.
“We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender, and even if, which I do not for a moment believe, this island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British fleet, would carry on the struggle, until, in God’s good time, the new world, with all its power and might, steps forth to the rescue and the liberation of the old.”
Although this was obviously intended to unite and inspire the population, it was also an implicit invitation to persistent pacifists to speak up, stand up or, if necessary, flee.
To Vera Britten, success was to be found in defeat. A singular opinion but admirably clear.
“There is a strange lack of dignity in conquest; the dull, uncomplaining endurance of defeat appears more worthy of congratulation.”
I am no geopolitics expert (I am no anything expert) but I would say that it is obvious that a nation under attack has a reasonably clear idea of what success looks like. If it is losing the war, this will change for the worse where a primitive form of survival becomes an aspiration. We can all look at Ukraine now and make up our own minds about that.
Where nations are aggressors under the banner of morality, the definition of success is much harder.
The US and its allies invaded Iraq in 1991. That was named Operation Desert Shield, so-called because it was seen as an exercise to protect Saudi Arabia from Saddam Hussein following his annexation of Kuwait. Desert Storm was the exercise to drive the Iraqis out of Kuwait. Some thought that the coalition troops should have continued to Baghdad and deposed Saddam. The decision not to do this was explained by Dick Cheney on the grounds that the US would effectively have had to govern Iraq. This was an interesting interpretation of success and arguably rather prophetic.
In March 2003 the US decided to overthrow Saddam on the grounds that he supported the 9/11 terrorists and that he had weapons of mass destruction. Neither of these assertions was conclusively supported by evidence. With such a shaky basis for this war it is perhaps not surprising that the involvement continued until 2011 and left Iraq in chaos.
The invasion of Afghanistan in 2001 managed to make the Iraq campaign look coherent. Around twenty years later the US finally withdrew leaving the Taliban in charge. If during those years anyone asked what success looked like, no one gave a useful answer.
THREE PROBLEMS OF DEFINING SUCCESS
COMMITMENT
Yet I see three problems with knowing and making public the definition of success. For a start, it is a commitment that is anathema to most political and economic leaders. It invites all kinds of judgement. It can be avoided by convincing your subjects that inconvenience, pain or hardship are inevitable and also for the greater good. Worth doing for its own sake.
In the name of defending the planet, people have for years been trying to cancel most of the gains of the twentieth century. This might be borne with pride for those who are relatively unaffected personally (a nod to John Kerry who does not have a private jet but sometimes enjoys a lift in his wife’s) and bearable for the first world punters who can consider buying an electric car and cutting back on plastic use but the news is beginning to reach the poorest 800 million or so in the world whose leaders have accepted bribes in return for shelving the economic growth that usually results from industrialisation. Awkward.
FAILURE
Secondly, failure is brave to risk and hard to take. Some very brilliant people say that if they hadn’t tasted failure they wouldn’t have achieved, recognised or appreciated success. Good for them. For most people failure is best avoided by not specifying what success looks like.
SUCCESS
Thirdly, success can be a let down. What do you do next? It may not have been ideal for your mental or physical health but did you battle through all the stress, earning respect and enemies in varying amounts just to step back and say job done?
Oh well, in the end, everybody dies (unless your goal is to achieve eternal life: I could add a link to some stuff but I’m not going to).
LESSONS FOR INVESTMENT
All of the above is the prelude to an investment lesson. Most things are, come to think of it.
When we make investments it is really worth asking what we want to achieve.
The largely unspoken truth for many is that they don’t want to lose money. It is largely unspoken because it seems humiliatingly unambitious. It would be a stretch to describe this as success. Rather like never leaving your house to avoid being run over by a bus.
To go to the other extreme, if your dream is to become absurdly rich by investing in something you don’t understand, be honest and prepare to fail.
The obvious investment benchmark for any active investor is to beat the return on passively invested money.
During the QE years of negligible, zero or even negative interest rates this was interesting only in that it encouraged speculation.
Now, in the UK there is a benchmark of 4% or so. We may say that achieving an annualised return of more than 4% can be counted as a success. This really should not be so difficult. There are numerous decent listed companies in the UK with dividend yields higher than that. It is a little distressing that investing habits in Britain are so restrained.
In 1963, half of the UK stock market was owned by private investors – this ratio has now collapsed to about 10%. Now doubt there are many explanations for this but for me, moving private ownership of UK shares back to 20% would certainly look like success.