Investment Metaphor #1: Cane Toads

Mar 27

Mar 27 Investment Metaphor #1: Cane Toads

I am beginning a new series on investment metaphors—non-economic examples of the power of compounding in action. First in this series is the population of Cane Toads in Australia. In June of 1935, a mere 102 non-native Cane Toads were introduced to Australia to control the destructive Cane Beetle. Today the number of poisonous Cane Toads is over 200 million, and the toads are having a serious environmental impact on many species native to Australia.

The graphic above, representing the spread of Cane Toads from 1940 through 1980, is an excellent visual representation of the power of compounding. Of course, the impact of your investments, unlike that of the toads, will be mainly positive! It's easy to be too short-sighted in investing, just like those who introduced the Cane Toad to Australia. Keep an eye on the long term, folks, and trust your long-term strategy! Remember the toads!